LECTURES 

—  ON  — 

FIRE  INSURANCE 


Being  the  Substance  of  Lectures  given  before  the  Evening 
Classes  in   Fire  Insurance  conducted  by  The  Insur- 
ance   Library   Association    of    Boston   during 
the  Fall  and  Winter  of  Nineteen  Hun- 
dred   and    Eleven    and  Twelve. 


PRICE,  $3.5a.NET 


1912 

The   Insurance   Library  Association   of  Boston 

Boston,   Massachusetts 

U.  S.  A. 


p  -0 


Copyright,  191  2 

The  Insurance  Library  Association  of  Boston 
Boston,  Massachusetts 


P'kank  Wood,  Printer 
Boston,  Mass. 


PREFACE 


CONTENTS. 
Parti 


FIRE    HAZARDS 1-122 

H  1.  Electrical  Fire  Hazards.     Ralph  Sweetland,  Engineer, 

The  New  England  Fire  Insurance  Exchange     .  .  .  3-35 

IT  2.  Common  Fire  Hazards.      J.  Albert  Robinson,  Editor  of 

Fire  Records,  National  Fire  Protection  Association   .  .  36-94 

113.  Boot  and  Shoe  Factories:    Processes  and  Fire  Hazards. 

Benjamin    Richards,    Inspector,   Underwriters'   Bureau  of 

New  England .         95-122 

Part  II 

NOTES   ON    RATES    AND    RATE    MAKING.    Gayle  T.  For- 

bush.  General  Agent,  The  Royal  Exchange  Assurance      .       123-153 

Part  III 

FIRE    PROTECTION:   Public  and  Private 155-272 

1.  Theory  of  Fire   Protection    and   Chemistry  of   Fire. 

Gorham  Dana,  Manager,   Underwriters'   Bureau  of   New 

England 157-166 

2.  Pails  and  Chemical  Extinguishers.     Mr.  Dana      .         .       166-180 

3.  Standpipes  and  Hose — Meters.     Mr.  Dana      .         .         .       180-188 

4.  Watchmen's     Service— Self-Inspection — Private     Fire 

Brigades.     Mr.  Dana 189-201 

5.  Automatic  Alarms.     Mr.  Dana       .....  202-214 

6.  Fire  Departments.     Mr.  Dana 215-226 

7.  Pumps.     Benjamin  Richards        ......  227-247 

8.  Waterworks.     Mr.  Richards 248-260 

9.  Municipal  Fire  Alarms.     Ralph  Sweetland      .         .         .  261-271 

Part  IV 

FIRE  INSURANCE  POLICY  FORMS  AND  CLAUSES. 
W.  B.  Medlicott,  General  Agent,  Atlas  Assurance  Com- 
pany, Ltd.,  Lecturer  on  Fire  Insurance,  Graduate  School  of 
Business  Administration,  Harvard  University        .  .  .       273-385 

PartV 

LOCAL  AGENCY  ORGANIZATION  AND    MANAGEMENT       387-460 

1.  Common  Law   of  Agency   and   Massachusetts   Statute 

Law  of  Agency.     Frank  M.  Forbush,  Attorney-at-Law       389-432 

2.  Local  Agency  Office  Systems   and   Accounts.     E.  W. 

Beardsley,    Ex-President,     The    National    Association    of 

Local  Fire  Insurance  Agents     ......       433-441 

3.  Notes  on  Local  Agency  Compensation.     Gayle  T.  For- 

bush                442-453 

4.  Office  Organization  and  Management.     Frank   H.Bat- 

tilana.   Assistant  Manager    New    England  Department  of 
the  Pennsylvania  Fire  Insurance  Company         .          .          .       454-460 
INDEX 461-475 


265501 


PREFACE 

In  offering  to  readers  this  volume  of  lectures  on  Fire  Insurance  the  trustees  of 
The  Insurance  Library  Association  are  actuated  solely  by  a  desire  to  be  helpful  in 
the  movement  for  the  better  training  of  young  men,  which  seems  now  to  be  gen- 
eral throughout  the  country. 

The  lectures  themselves  were  delivered  before  students  in  evening  classes 
formed  to  aid  men  in  their  preparation  for  the  examinations  of  the  Insurance 
Institute  of  America.  It  is  not  supposed  that  they  possess  in  all  cases  either  excep- 
tional originality  of  thought  or  exhaustiveness  of  treatment.  The  lecturers  are 
men  engaged  as  managers,  inspectors,  engineers  or  attorneys  at  law,  in  the  suc- 
cessful performance  of  exacting  duties.  Lack  of  time  alone,  from  the  insufficient 
hours  of  days  already  filled  with  labor,  rendered  impossible  the  extended  research 
and  comprehensive  comparison  indispensable  to  works  of  pure  scholarship. 

The  aim  has  been  to  combine  theory  with  practice  and  to  present  problems 
from  the  standpoint  of  the  beginner.  If  the  reader  has  been  made  to  see  the 
inherent  difficulties  of  many  of  these  problems  it  is  felt  that  he  will  have  been 
helped  more  than  if  offered  easy  solutions  which  seem  simple  but  do  not  solve. 

The  Association  is  greatly  indebted  to  the  lecturers  all  of  whom  have  offered 
their  services  freely.  Especially  is  it  indebted  to  Frank  M.  Forbush,  Esq., 
attorney-at-law,  who,  although  not  a  member,  contributed  the  chapters  on  local 
agency  law,  which  "may  be  confidently  claimed  constitute  the  most  comprehen- 
sive monograph  on  this  subject,  as  it  applies  in  Massachusetts,  which  has  ever 
been  written. 

Also  mention  should  be  made  of  those  individuals  and  firms  through  whose 
courtesy  most  of  the  illustrations  used  in  these  pages  were  made  available.  They 
include  Messrs.  Knight  6c  Thomas,  American  District  Telegraph  Company, 
Eco  Magneto  Clock  Company,  American  La  France  Fire  Engine  Company, 
A.  J.  Morse  &  Son,  Boston  Auto  Fire  Alarm  Company,  Badger  Fire  Extin- 
guishing Company,  Hersey  Manufacturing  Company,  United  Shoe  Machinery 
Company,  New  England  Bureau  of  United  Inspection,  and  the  National  Fire 
Protection  Association  of  Boston;  C.  T.  Ham  Manufacturing  Company,  Min- 
imax  Company,  Newman  Clock  Company,  Pyrene  Manufacturing  Company, 
Safety  Fire  Extinguisher  Company,  and  the  Gamewell  Fire  Alarm  Company 
of  New  York  ;  the  Robinson  Fire  Apparatus  Manufacturing  Company  of  Saint 
Louis  ;  Builders  Iron  Foundry  Company  of  Providence  ;  The  Insurance  Field  of 
Louisville,  Ky.  ;  H.  J.  M.  Howard  Manufacturing  Company  of  Washington, 
Buffalo  Steam  Pump  Company,  Buffalo ;  Rodney  Hunt  Machine  Company, 
Orange,  Mass.,   and  the  Waggoner  Sanatory  Fire  Bucket  Company  of  Chicago. 

D.   N.   Hanov,   Librarian. 

Boston,  Massachusetts,  May  31,  1912. 


PART  1. 

FIRE    HAZARDS 


ELECTRICAL  FIRE  HAZARDS 

LECTURE  I 

Of  all  forms  of  energy  available  for  man's  use,  electricity  is  at  Introduction. 
the  present  time  the  most  convenient,  and  is  the  one  most  widely 
used.     Its  applications  are  increasing  at  a  tremendous  rate,  and  one 
does  not  dare  to  prophesy  what  may  be  expected  even  within  the 
next  few  years. 

As  an  example  of  how  readily  electricity  may  be  converted  into 
light,  heat  or  power,  I  might  cite  what  may  be  obtained  from  the 
same  fixture  in  the  average  home.  This  fixture  may  supply  an 
incandescent  light, — we  may  connect  a  flatiron  or  a  chafing  dish,  or 
we  may  connect  an  electric  fan  or  sewing  machine  motor;  i.  e.,  we 
may  use  the  electricity  connected  with  the  fixture  for  light,  heat  or 
power,  by  simply  connecting  the  ordinary  attachment  plugs. 

While  gas  offers  the  advantages  of  being  readily  converted  into 
light,  and  more  economically  into  heat,  it  can  only  be  converted 
into  power  with  the  aid  of  a  complicated  machine  not  at  all  suitable 
where  a  small  amount  is  needed,  neither  can  it  be  used  in  many  of 
the  locations  available  for  electric  power.  While  electricity  may 
be  used  for  light  in  all  locations  under  suitable  restrictions,  gas 
mav  onlv  be  used  where  an  open  flame  is  permissible. 

At  the  outset  there  is  one  point  which  should  be  made  clear.      Object  of 
and  that  is,  the  fire  protection  engineer  or  inspector  examines  an      Electrical 
installation    of    electric    light,    heat    or   power   solely   to    ascertain       nspection. 
whether  it  is  safe  from  a  liability  to  cause  fires  or  be  dangerous  to 
life.     He  has  nothing  to  do,  however,  as  to  whether  or  not  such  an 
installation  is  suitable  for  the  uses  intended.     While  an  installation 
may  be  entirely  satisfactory  from  a  fire  or  life  point  of  view,  it  may 
not  be  at  all  suitable  for  the  convenience  of  the  owner  or  occvipant. 


■LECTURES  ON  FIRE  INSURANCE 


The  fire  protection  engineer  or  inspector  cannot  pretend  to  do  the 
electrical  engineering  necessary  for  even  a  moderate  sized  installa- 
tion, but   shoidd  be   capable  of   passing  on  plans  and  the  execution 
of  the  work  that  property  and  life  may  be  properly  safeguarded. 
How  Fires  by  As  we  are  more  closely  interested  in  safeguarding  installations 

Electricity       that   tliev  may  not  pro\  e  a  menace  to  property  by  causing  fires,  we 
are  Caused.     ^^.j|]  ^.,„lfi,lt>  ourselves  to  the  fire  hazard.      The  question  of  life  will 
only  be  mentioned  incidentally. 

Fires  may  be  caused  by  electricity  by  one  or  both  of  two  general 
ways  : — 
By  First. — By  the  overheating  of  conductors,  switches  or  other 

Overheating.  de\ices,  which  may  cause  the  insulation  to  ignite  or  the  device  to 
overheat  and  set  fire  to  surrounding  objects.  It  is,  therefore,  nec- 
essary to  provide  protection  so  that  the  current  on  the  conductors 
and  devices  may  be  limited  to  their  safe  carrying  capacity.  Fuses 
and  circuit  breakers  are  therefore  installed  so  as  to  prevent  ah 
abnormal  flow  of  current.  These  protective  devices  themselves 
may  also  heat,  so  that  it  is  necessary  to  provide  for  their  proper 
location. 

Examples  of  fire  caused  bv  overheating  of  conductors  or  devices. 
A  circuit  is  properly  protected  by  fuses  when  it  is  installed. 
Later  the  number  of  lamps  is  increased  or  the  motor  is  replaced  by 
a  larger  one.  When  the  increased  load  is  started  the  fuses  blow 
and  open  the  circuit.  (Just  what  they  were  designed  to  do.)  An 
irresponsil)le  party  then  increases  the  size  of  the  fuses,  or  worse  yet, 
he  substitutes  a  copper  wire  or  a  hairpin.  The  lights  burn  appar- 
ently all  right,  or  the  motor  runs  satisfactorily  and  the  man  or  boy 
believes  he  is  as  good  an  electrician  as  the  average  one.  Later, 
however,  the  wires  overheat  and  the  insulation  is  ignited,  thus  set- 
ting fire  to  the  surrounding  objects. 

As  another  example  take  a  poor  joint  in  a  wire.  When  a 
small  amount  of  current  flows  the  heat  is  not  appreciable,  but  as  the 
current  increases,  owing  to  the  poor  contact,  the  joint  heats  and  the 
insulation  is  ignited.  Again,  we  may  have  this  overheating  with- 
out overloading  the  circuit,  simply  by  poor  connections.  For 
example,  a  binding  post  which  makes  connection  with  a  conductor 
in  a  fitting  is  set  up  securely,  but  owing  to  the  vibration  of  the 
building  this  contact  becomes  loose.  Heating  takes  place,  and 
the  insulation  is  ignited. 

Second, — By  the  forming  of  an  "arc."  An  arc  is  always 
accompanied  by  heal,  and  if  it  is  of  sufficient  capacity  may  not 


ELECTRICAL  FIRE  HAZARDS 


only  ignite  combustible  material,  but  may  melt  metals.  Arcs  may  By  Forma- 
be  formed  between  two  wires  of  a  circuit,  between  a  wire  and  any  tion  of  an 
grounded  metal,  or  between  a  metal  and  another  grounded  metal,  the  '^'■'^* 
former  being  in  contact  with  a  wire  of  a  circuit.  On  this  account, 
all  wires  are  considered  as  "bare,"  and  are  to  be  so  supported  that 
even  if  bare  they  cannot  come  in  contact  with  anything  other  than 
their  designed  supports.  One  or  two  examples  may  bring  out  my 
meaning  clearer.  As  an  example  of  an  arc  between  wires,  I  might 
cite  what  may  happen  behind  the  canopy  of  a  fixture  where  the 
wires  of  the  fixture  are  joined  to  the  circuit  wires.  The  wireman 
through  carelessness  may  fail  to  properly  tape  or  cover  the  joints, 
and  as  some  canopies  have  very  little  space  at  the  rear  when  the 
canopy  is  pushed  back  the  wires  come  in  contact.  When  the  cur- 
rent is  turned  on  an  arc  is  established  between  the  conductors  which 
before  the  fuses  open  may  set  fire  to  the  insulation  and  thus  to  the 
building. 

As  a  somewhat  different  example  of  an  arc  I  might  cite  the 
fire  in  a  department  store  in  New  Haven  some  years  ago.  The 
elevator  controller  was  operated  by  a  wheel  in  the  car.  The  boy 
who  ran  the  elevator  threw  the  wheel  around  sharply,  which  caused 
the  lever  arm  of  the  controller  to  come  in  contact  with  the  wire 
grill  work  about  the  ele\ator.  This  grill  work  was  not  grounded 
in  the  basement,  as  it  rested  on  dry  cement.  It  was  in  contact  with 
the  metal  of  the  main  roof,  the  top  of  the  elevator  extending  above 
this  main  roof.  The  metal  of  the  roof  was  grounded  through  the 
roof  leaders,  and  an  "arc"  was  established  between  the  grill  work 
of  the  elevator  and  the  metal  of  the  roof,  setting  the  roof  on  fire. 
This  arc  was  five  or  six  stories  above  where  the  original  contact 
was  made. 

vStill  another  example  was  a  case  that  occurred  in  the  Back  Bay 
a  few  years  ago.  The  house  where  the  fire  happened  did  not  have 
any  electric  light  wires  in  it.  In  the  basement  a  gas  pipe  rested  on 
a  water  pipe  making  a  slight  contact.  Either  in  the  ground  or  in 
another  adjacent  building  a  wire  was  brought  in  contact  with  a  gas- 
pipe.  Probably  due  to  the  resistance  of  the  joints  the  water  pipe 
was  a  better  ground  than  the  gas  mains.  An  "  arc  "  was  established 
lietween  the  gas  and  the  water  pipe,  which  melted  a  hole  in  the  gas 
pipe,  set  the  gas  on  fire,  and  ignited  the  woodwork  in  the  basement 
ceiling. 

The  chief  requisites  for  a  safe  installation  are, — the  use  of 
approved  "material."     By  this   I    mean    material   that    has    been 


LECTURES  ON  FIRE  INSURANCE 


Requisites  for  examined  and  is  known  to   be  suitable  for  the   uses  intended,  with 

Safe  ;^   reasonable  margin  of  safety. 

Installation.  ^  design  which  will  permit  of  easy  inspection  and  repair. 

The  choice  of  a  type  of  installation  which  will  afford  the 
greatest  protection  to  the  wires,  switches,  cut-outs  and  devices. 

Last,  and  possibly  the  most  important  of  all,  good  mechanical 
workmanship. 

Electrical  Terms 

Electrical  ^  wish  now  to  take  up  certain  electrical  terms,  a  proper  under- 

Terms  standing  of  which  is  necessary  in  order  that  the  rules  for  safe  wiring 

Defined.  niay  be  clearly  understood. 

Direct  Current. — Direct  current  is  current  of  such  a  char- 
acter that  what  is  usually  called  the  "direction"  of  the  current  is 
always  the  same,  or,  more  exactly,  the  magnetic  effects  of  the  cur- 
rent are  not  reversed. 

Alternating  Ctirrent. — Alternating  current  is  current  of  such 
a  character  that  what  is  called  the  "  direction"  is  rapidly  reversed. 
This  reversing  is  made  by  means  of  the  generator.  The  number  of 
changes  per  second  is  called  the  frequency,  and  the  frequencies  most 
commonly  used  at  the  present  time  are  25  and  60,  Some  of  the 
older  installations  use  120  or  135,  however. 

Both  direct  and  alternating  current  are  in  common  use  for 
lighting  and  power,  although,  except  in  the  metropolitan  cities,  alter- 
nating current  is  more  frequently  used  than  direct.  As  a  general 
thing,  all  of  our  private  plants  in  city  blocks,  such  as  the  plant  in 
the  block  in  which  we  are,  use  the  direct  current.  Direct  current 
is  also  used  almost  exclusively  for  street  railway  power,  except  on 
some  of  the  railways  where  high  tension  alternating  current  is  used, 
such  as  the  electrification  of  the  New  York-Stamford  line  of  the 
New  York,  New  Haven  and  Hartford  Rail  Road. 

Incandescent  lamps  and  heating  devices  are  the  same  whether 
alternating  or  direct  currents  are  used,  and  are  interchangeable  on 
different  circuits.  The  construction  for  alternating  current  motors  is 
different  from  that  where  direct  current  is  used.  Arc  lamps  are  also 
somewhat  different  for  alternating  current  than  for  direct  current. 
However,  as  far  as  our  purposes  are  concerned  we  need  not 
concern  ourselves  with  the  difference  between  these  two  types. 
The  same  strength  of  current  will  heat  a  conductor  the  same 
whether  it  is  direct  or  alternating  current.  A  direct  current  arc, 
however,  is  somewhat  more  severe  than  an  alternating  current  one. 


ELECTRICAL  FIRE  HAZARDS 


Current. — Current  is  measured  in  amperes.     It  may  be  com-   Electrical 
pared  to  the  number  of  gallons  per  minute  carried  by  a  water  pipe.    Terms 
More  current,  other  things  being  equal,  will  always  do  more  work,    D«"ncO' 
and  will  always  cause  more  heat  in  the  conducting  wires,  cables, 
appliances,  etc.     I   may  say,  at  this  time,  that  the  heating  of  dif- 
ferent amounts  of  current  increase  as  the  square  of  these  different 
amounts. 

Voltage. — Voltage,  potential  or  pressure  are  measured  in  volts. 
Volts  measure  the  propulsive  force  which  causes  a  "current"  to 
flow  through  a  conductor.  You  may  think  of  it  as  the  electric 
pressure  produced  by  the  dynamo  or  battery.  Given  a  circuit,  if 
the  pressure  is  increased  the  amount  of  current  will  increase. 
Since  it  is  the  voltage  or  pressure  which  will  cause  electricity  to 
stray  from  the  path  prepared,  the  higher  the  voltage  or  pressure 
more  care  must  be  taken  to  see  that  the  path  is  maintained. 

Difference  of  Pote/it/'al. — Two  points  on  conductors  or  he- 
tween  a  conductor  and  the  ground  are  said  to  be  at  different  poten- 
tials. Where  this  difference  does  exist  current  tends  to  pass 
between  them.  When  the  current  passes  along  a  conductor  it  pro- 
duces heat.  When  it  jumps  between  conductors  or  between  con- 
ductors and  the  ground  it  produces  an  "arc." 

Resistance. — Resistance  is  measured  in  ohms.  All  sul:)stances 
offer  resistance,  and  this  is  true  of  metals,  liquids  and  gases.  A 
good  conductor  offers  little  resistance,  while  a  poor  conductor  may  , 

offer  considerable  resistance  and  thus  be  a  good  insulatcjr. 

Copper  is  one  of  the  best  conductors,  and  thus  has  little  resist- 
ance. Iron  is  about  one-seventh  as  good  a  conductor  as  copper,  and 
thus  the  same  size  and  length  of  iron  wire  would  have  about  seven 
times  the  resistance  of  the  same  size  of  copper.  Wood,  when  dry, 
is  a  poor  conductor,  but  a  good  insulator. 

Now,  as  all  conductors  have  some  resistance,  to  cause  a  current 
to  flow  in  a  conductor  or  device  requires  a  certain  voltage  or  pres- 
sure.     This  brings  us  to  what  is  known  as  (3hm's  law. 

Ohm'' s  Lazv. — This  relation  between  voltage  current  and  resist- 
ance may  be  stated  as  follows  : 

^      R 

when  C  ^Current  in  amperes 

E  =  Voltage  or  pressure  in  volts 
R  ^Resistance  in  ohms. 
Please  note  that  C  varies  directly  as  E  and  in\  ersely  as  R. 


Defined. 


8  LECTURES  ON  FIRE  INSURANCE 

Electrical  This  law  is  absolutely  true  for  direct  currents,  but  is  not  wholly 

Terms^  true  for  alternating  currents. 

Poxver. — Power  is  measured  in  watts.  A  watt  equals  1  ampere 
X  1  volt.  Usually  we  speak  of  kilowatts  (1000  watts).  A  horse 
power  equals  746  watts,  so  that  a  kilowatt  equals 

^^^^  HP        1^    HP 

Take  an  incandescent  lamp  example.  K  16  c.  p,  carbon  fila- 
ment lamp  consumes  ^  ampere  at  110  volts.  The  watts  are  therefore 
J  X  110  ^55.  \Vith  the  alternating  current  this  product  of  the  volts 
and  amperes  does  not  give  the  power  consumed,  as  there  is  another 
factor  known  as  the  power  factor.  With  direct  current,  if  the  cur- 
rent, as  read  by  a  current  meter  known  as  an  ammeter,  is  100  and 
the  volts  are  10(1  then  the  watts  are  10,000  or  10  kilowatts.  With 
alternating  current  this  power  factor  may  be  as  low  as  .60,  so  that 
the  power  instead  of  being  10,000  watts  may  be  only  6000.  or 
6  kilowatts. 

Multiple  Connection. — When  devices  are  so  connected  that 
the  current  has  a  path  through  each  separately  from  one  supply 
wire  to  another  they  are  connected  in  "  multiple." 

Series  Connection. — When  the  devices  are  so  connected  that 
they  come  one  after  the  other  and  the  current  which  flows  through 
one  flows  through  all  they  are  said  to  be  connected  in  series. 

Shunt. — A  shunt  is  a  by-path  between  two  points  so  connected 
that  part  of  the  current  will  traverse  it.  The  amount  of  current 
that  the  shunt  takes  depends  upon  the  relation  of  the  resistance  of 
the  shunt  to  the  resistance  of  the  main  path. 

Cut-out. — A  cut-out  is  a  device  for  automatically  breaking  a 
circuit  when  the  current  reaches  a  predetermined  amount.  A  30 
ampere  fuse  is  a  cut-out  designed  to  open  when  the  current  reaches 
slightly  in  excess  of  that  amount.  A  circuit  breaker  is  an  automatic 
switch  and  is  also  called  a  cut-out.  A  fuse  when  it  opens  is  de- 
stroyed, while  a  circuit  breaker  may  be  reset  and  be  as  good  as  new. 
A  switch,  fuse  or  circuit  breaker  is  single  pole  when  it  opens  one 
wire  of  a  circuit,  double  pole  when  it  opens  two  poles,  triple  pole 
when  it  opens  three  poles. 

Ground. — A  ground  is  a  connection  either  intentional  or  acci- 
dental between  a  path  of  a  circuit  and  the  earth  or  any  metal  or 
conducting  substances  which  are  in  electrical  connection  with  the 
earth,  such  as  water  or  gas  J^ipes,  metal  work  of  buildings,  etc. 


ELECTRICAL  FIRE  HAZARDS 


Short  Circtiit. — A  short  circuit  is  a  shunt  with  practically  no  Electrical 
resistance.     It  usually  results  in  a  very  considerable  rush  of  current,    Terms 
forming  an  arc  which  may  cause  a  fire.  Defined. 

Constant  Potential  Systems. — A  constant  potential  system  is 
one  in  which  the  pressure  or  potential  between  the  different  wires 
of  the  circuit  are  approximately  the  same.  With  such  a  system,  as 
the  load  on  the  circuit  increases  the  current  increases. 

Constant  Current  System. — A  constant  current  system  is  one 
in  which  the  current  is  maintained  approximately  constant,  regard- 
less of  the  character  or  the  power  consuming  devices  on  the  circuit. 

The  arc  and  incandescent  street  lamps  are  usually  operated  on 
a  constant  current  circuit,  principally  for  convenience  of  control  and 
low  cost  of  installation. 

T-wo-zvire  System. — A  two-wire  system  is  one  having  a  single 
pair  of  distributing  wires. 

Thrce-'ivire  System. — A  three-wire  system  is  a  special  form 
usually  employing  two  generators. 

Transformer. — A  transformer  is  a  device  for  reducing  a  high 
potential  alternating  current  to  a  low  potential.  By  this  means  we 
may  generate  at  a  high  potential  transmit  to  the  location  where  we 
wish  to  use  the  power  and  then  reduce  to  a  potential  or  voltage 
economically  and  safe  to  use. 

Now  let  us  go  back  to  power,  which  we  said  was  the  product 
of  the  volts  and  amperes.  While  for  alternating  current  with  a 
motor  load,  there  are  other  factors  with  a  lighting  load.  Ohm's  law 
is  true  enough  for  our  purposes. 

Watts  =Volts  X  Amperes. 

If  we  raise  volts  we  can  reduce  amperes,  and  still  furnish  the 
same  watts  or  power.  Suppose  we  wish  to  transmit  10,000  watts 
or  10  kw.  a  certain  distance. 

If  a  pressure  of  200  volts  is  used  the  current^   '>aa   "^'^^  amp. 

,  AAA       ,        1  1*>^00      . 

it  we  use  z,000  volts  then  current  =     >  ^  .  =ii. 

l!000 

Again  if  C  =  --  then  C  R  =E. 

rv 

Now  watts  =C  X  E,  then  watts  ^C-  R. 

Now  the  power  lost  in  transmitting  a  current  is  equal  to  the 
square  of  the  current  times  the  resistance.  As  the  resistance  of  a 
given  wire  is  a  constant,  the  energy  lost  varies  directly  as  the  square 
of  the  current. 


JO  LECTURES  ON  FIRE  INSURANCE 

Electrical  Assume  that  the  resistance  of  the  circuit  over  which  we  wish 

Terms  to    transmit    10  kw.    is   1    ohm,    with    the    voltage    of    200,  then 

Defined.  the    power    lost    in    transmission    is     50    amp.    x    50    amp.    x    1 

ohm  =2,500  watts.     Now  this  is  ^  or  25*/^  of  the  power,  and  this 

has  been  lost  in  the  heating  of  the  conducting  wires.     If  the  voltage 

is  2,000,  then  the  power  lost  is 

In  other  words,  this  latter  is  100  times  as  economical  as  the  first,  or 
by  increasing  the  voltage  10  times  we  improved  conditions  100  times. 

Without  going  into  the  theory,  it  is  enough  to  say  that  a  trans- 
former can  be  used  on  alternating  current  but  cannot  be  used  on 
direct  current.  Also  that  we  may  only  reduce  direct  current  by 
means  of  apparatus  having  moving  parts,  thus  requiring  attendance. 
Alternating  current  may  be  reduced  by  apparatus  without  moving 
parts,  and  thus  without  attendance. 

Again,  direct  current  requires  the  use  of  a  commutator  or  rec- 
tifiyer,  the  current  generated  being  alternating.  Above  600  volts 
commutation  becomes  difficult.  If  it  is  necessary  to  use  direct  cur- 
rent some  distance  from  where  our  generators  are  located,  it  is  pre- 
ferable to  generate  alternating  current,  transmit  to  the  place  where 
it  is  to  be  used,  step  down  to  a  low  potential  and  then  rectify  to 
direct  current  by  apparatus  having  moving  parts. 

LECTURE   II 

Early  Recog-  The    hazards    of    electricity   were    early    recognized,    and    on 

nition  of  October  19,   1881,   the    New  York    Board    of    Fire    Underwriters 

rlazards  ot      {gg^ed  a  resolution  which  is  so  short  I  will  quote  : — 

"  Resolved  :  That  the  Committee  on  Police  and  Origin 
of  Fires  are  hereby  directed  to  notify  the  owners  and  occupants 
of  all  buildings  in  which  uncovered  electric  light  wires,  or  in 
which  arc  lights  with  open  bottoms  or  without  globes  are 
found,  that  the  wires  must  be  covered,  and  the  lamps  altered 
to  conform  to  the  rules  of  this  Board  within  ten  days  from 
date  of  notice,  and  request  that  the  lights  shall  not  be  used  until 
the  alterations  are  made :  and  in  case  the  alterations  are  not 
made  within  said  time,  the  Committee  are  hereby  directed  to 
notify  the  members  of  the  Board  of  said  failure,  and  the  com- 
panies insuring  said  property  are  hereby  recommended  to  give 
notice  to  the  owners  and  occupants  of  such  buildings  that 
unless  the  request  is  complied  with,  and  the  alterations  made 
within  a  reasonable  time,  that  the  insurance  on  said  property 
will  be  cancelled." 


Electricity. 


ELECTRICAL  FIRE  HAZARDS  H 


On  October  20,  1881,  or  one  day  later  than  this  resokition 
which  I  have  just  quoted  was  issued,  a  circular  was  sent  out  by  the 
Boston  Manufacturers'  Mutual  Fire  Insurance  Company,  which 
called  attention  to  about  the  same  points  as  mentioned  in  the  New 
York  Board's  Resolution.  In  January,  1882,  the  New  York  Board 
of  Fire  Underwriters  issued  a  vei'y  brief  circular  containing  rules 
for  the  installation  of  electric  lights,  and  about  the  same  time  the 
Boston  Manufacturers'  Mutual  Fire  Insurance  Company  issued 
circulars  on  this  same  subject.  I  would  call  your  special  attention 
to  the  fact  that  these  rules  pertain  entirely  to  arc  light  installations. 

In  May,  1882,  the  National  Board  of  Fire  Underwriters  issued  Electrical 
their  first  set  of  rules,  which  were  later  adopted  by  the  Boston  R^l^s. 
Board  of  Fire  Underwriters.  The  first  rules  of  the  New  England 
Insurance  Exchange  were  issued  in  August,  1885.  Previous  to 
that  time  they  used  the  rules  of  the  Boston  Board,  From  this 
time  to  the  early  part  of  1892  rules  were  issued  by  various  rating 
organizations  and  differed  considerabl}'. 

In  the  early  part  of  1892,  through  the  initiative  of  C.  M. 
Goddard,  Secretary  of  the  New  England  Insurance  Exchange, 
rules  were  prepared  by  representatives  from  various  Underwriting 
Boards  in  New  England,  Middle,  South  Atlantic  and  the  Gulf 
States.  Out  of  this  grew  the  Electrical  Committee  of  the  Under- 
writers' National  Electrical  Association.  In  1S97  there  was  held 
the  first  National  Conference  of  delegates  from  the  American 
Institute  of  Architects,  the  American  Institute  of  Electrical  Engi- 
neers, the  American  Society  of  Mechanical  Engineers,  the 
American  Street  Railway  Association,  the  Factory  Mutual  Fire 
Insurance  Companies,  National  Electric  Light  Association,  National 
Association  of  Fire  Engineers,  National  Board  of  Fire  Under- 
writers and  Underwriters'  National  Electric  Association,  and  in  that 
year  the  first  edition  of  the  National  Electrical  Code  was  issued. 
The  preparation  of  these  rules,  however,  devolved  upon  represen- 
tatives of  underwriting  organizations.  From  that  time  until  1911 
the  Electrical  Committee  of  the  Underwriters'  National  Electrical 
Association  prepared  the  rules,  which  were  issued  in  odd  years, 
viz.,  1899,  1901,  1903,  etc. 

At    the  meetings  when  the  rules  were    considered    the   Elec-   Representa- 

trical  Committee   always  invited    representatives  of  national   asso-   **'^^  Char- 

ciations,     engineers,    inspectors    and     others,    and     allowed    these   ^*i "  °    . 

11-  .  -r  r  ,      ,  Electrical 

representatives  to  take  part  in  the  discussions.     It  was  felt,  how-   p  j 

ever,    by  Secretary   Goddard  of    the   Electrical  Committee  of  the 


12 


LECTURES  ON  FIRE  INSURANCE 


Underwriters'  National  Electric  Association,  that  as  the  National 
Fire  Protection  Association  had  for  its  active  members  National 
Associations  other  than  Underwriting  Organizations,  and  as  the 
National  Fire  Protection  Association  prepared  other  standards 
as  regards  tire  protection  and  fire  prevention,  this  was  the 
Association  which  should  take  over  the  work  of  the  Under- 
writers' National  Electric  Association.  Upon  his  initiative  this 
was  accomplished  early  in  1911,  and  the  edition  of  the  Code  is- 
sued in  that  year  was  prepared  by  a  committee  from  the  National 
Fire  Protection  Association. 

While  most  of  the  members  of  the  old  Electrical  Committee 
are  now  members  of  the  Electrical  Committee  of  the  N.  F.  P.  A., 
the  membership  of  that  committee  has  been  enlarged,  so  that  it 
now  inchides  representatives  from  the  American  Institute  of 
Electrical  Engineers,  the  American  Electric  Railway  Associa- 
tion, National  Electrical  Contractors'  Association,  National  Asso- 
ciation of  Electrical  Inspectors,  National  Electric  Light  Association, 
Electric  Jobbers,  and  in  addition  the  Chief  Electrical  Inspector 
of  the  citv  of  Chicago  and  the  Electrical  Engineer  of  the  city  of 
New  York.  So  you  will  see  that  all  Associations  in  any  way  inter- 
ested in  electric  wiring,  that  it  may  not  prove  a  menace  to  life 
and  property,  have  a  voice  in  the  framing  of  the  Code.  I  now 
propose  to  consider  some  of  the  more  important  features  covered 
by  the  Code. 


Class  A. 
Dynamo 
Rooms. 


Class  A. 
Dynamo 
Rooms. 


As  will  be  noted,  this  section  covers  not  only  dynamo  rooms, 
but  all  power  stations,  sub-stations  and  storage  battery  stations. 
To-day  the  average  electric  light  and  power  station  is  usually  con- 
structed of  fireproof  material ;  /.  e.,  with  brick  or  concrete  walls, 
concrete  floors  and  concrete  roof,  so  that  the  amount  of  combus- 
tible material  is  small,  although  there  is  always  some  present. 

The  tendency  is  for  a  concentration  into  large  stations,  with 
numerous  sub-stations  handling  the  light  and  power  in  more  or  less 
congested  communities.  For  example,  the  Edison  Electric  Illumi- 
nating Company  of  Boston  handles  practically  everything  in  Boston 
and  to  the  west  as  far  as  Hopkinton.  Current  is  sent  out  from 
the  station  in  South  Boston  at  13,000  volts,  and  then  is  stepped 
down  at  sub-stations  located  in  Needham,  Newton,  Natick,  Hop- 
kinton, Waltham,  Somer\ille,  Woburn,  Chelsea,  and  distributed 
to  these  \arious  municii^alities. 


ELECTRICAL  FIRE  HAZARDS  J3 


The    capacities    of    the    single    units    are    constantly   growing   Class  A. 
larger,  and  apparently  we  have  not  as  yet  reached  the  limit  oi  size.    Dynamo 
I    well    remember    while    in    Lynn  with    the    Thompson-Houston   Rooms. 
Electric   Company,    in   1S90,  that   when  a  '200   kw.    (267    H.   P.) 
machine  was  constructed  it  was  considered  a  wonder  by  all  em- 
ployees in  the  factory.     To-day  the  Chicago  Ellison  Electric  Illumi- 
nating Company  is  installing  machines  of  20,000  kw,,  or  one  hundred 
times  as  large  as  this  machine.     The    electrical  equipments  of  the 
largest  stations  are  yerv  complex,  but  the  tendency  seems  to  be  to 
simplify  them  as  much  as  practicable,  and  to  so  subdivide  the  station 
that  in  case  of  trouble  the  extent  of  the  damage  will  be  as  small  as 
possible.     As  you  can  well  imagine,  to  have  25,000  h.  p.  converted 
into  heat  from  a  short-circuit  is  bound   to  cause  serious  damage, 
however  carefully  the  apparatus  may  be  isolated. 

In  order  that  only  a  limited  part  of  the  station  might  be  put 
out  of  commission  in  case  of  any  derangement  in  one  of  its  parts, 
one  of  the  stations  of  the  Interborough  Railway  Company  of  New 
York  was  designed  so  as  to  be  in  five  parts,  each  part  consisting 
of  a  boiler  room,  dynamo  room  and  switchboard  room,  the  current 
from  the  several  parts  of  the  station  not  coming  together  until  after 
it  left  the  switchboard.  With  such  an  arrangement,  should  any 
accident  occur  in  one  of  these  divisions  of  the  station,  it  could  not 
extend  to  the  other  sections. 

With  these  thoughts  in  mind,  you  can  well  understand  that  it 
is  impossible  in  a  pamphlet  the  size  of  the  National  Electrical 
Code  to  cover  all  of  the  details  of  these  larger  stations.  Probably 
the  trouble  which  has  been  experienced  in  most  of  our  stations  has 
been  through  overcrowding,  this  due  largely  to  the  fact  that  it  has 
been  necessary  to  increase  the  capacity  of  the  station  beyond  that 
for  which  the  building  was  originally  designed,  thus  resulting  in 
crowding  the  apparatus  and  more  or  less  temporary  work  always 
conducive  to  trouble.  Generally  speaking,  the  generators,  trans- 
formers and  motors  in  a  station  do  not  present  the  hazard  that  the 
switchboard  and  the  mass  of  wiring  leading  from  the  same  does, 
although,  as  we  shall  note  later,  the  transformers  with  their  large 
amount  of  combustible  oil  should  be  separated  from  the  balance  of 
the  station.  It  is,  of  course,  extremely  essential  that  the  rules  for  safe 
wiring  should  be  follow  ed  in  these  stations,  and,  in  fact,  we  shoidd 
go  further  than  the  rules  in  order  that  every  precaution  may  be 
taken  to  avoid  interruption  of  service,  often  as  serious  with  public 
service  corporations  as  the  ilestruction  of  the  station  itself. 


14 


LECTURES  ON  FIRE  INSURANCE 


Generators.  It  will  be  noted  that  generators  should  be  located  in  dry  places. 

Moisture  is  apt  to  injure  machines,  and  in  certain  cases  may  cause 
short  circuits  or  grounds,  Xo  combustible  material  should  be  per- 
mitted near  a  machine,  and  it  should  be  so  located  as  to  provide 
for  ample  ventilation,  since  the  cooler  a  machine  can  run,  the 
greater  the  load  that  it  can  carry.  In  fact,  the  capacit\  of  a 
machine  is  dependent  upon  the  temperature. 

High  potential  machine  frames  should  preferablv  be  grounded, 
since  it  is  not  practicable  with  the-e  larger  machines  to  attempt  to 
insulate  them,  and  either  one  of  the  two  courses  should  be  followed  : 
/.  e.^  we  should  either  permanently  ground  or  effectively  insulate. 
You  will  recall  that  a  constant-potential  machine  is  one  where 
the  pressure  or  voltage  remains  fairly  constant,  the  current  increas- 
ing with  the  load.  It  is,  therefore,  necessarv  for  some  form  of 
protective  device  to  he.  provided  so  that  these  machines  may  not  be 
overloaded. 

Conductors.  In   the  previous   lecture    it   was  pointed    out    that   one  of    the 

important  requisites  of  a  safe  installation  was  ease  of  examination 
and  repair, — this  is  especiallv  true  with  conductors  in  a  central 
station  or  dynamo  room  ;  /.  <?.,  thev  should  lie  run  in  plain  sight  or 
encased  in  conduit  where  thev  may  be  readilv  removed  should  any 
damage  occur. 

In  our  smaller  private  plants  located  in  a  manufacturing  estab- 
lishment, the  dvnamos  are  usuallv  located  in  the  engine  room. 
Oftentimes  the  allotted  space  is  not  designed  for  the  machines,  so 
that  it  becomes  especially  necessarv  to  so  run  the  conductors  that 
thev  will  be  free  from  contact  with  piping  and  other  material 
usually  found  in  an  engine  room. 

Where  a  number  of  wires  are  run  together,  as  is  often  the 
case  in  a  dynamo  room,  it  is  extremely  desirable  that  the  outside 
cover  of  the  insulation  should  be  flameproof,  so  that  in  case  of  a 
cross  or  short-circuit  in  the  vicinity  of  these  wires  the  resulting 
flame  will  not  ignite  the  insulation. 

Switch-  While  the  Code  does  permit  at  the  present  time  switchboards 

boards.  to  be  constructed  of  hardwood  in  skeleton  form,  practically  all  of 

the  switchboards  which  are  built  to-day  are  constructed  of  marble 
or  slate.  They  should  be  located  so  as  to  be  accessible  from  all 
sides,  and  so  that  under  most  conditions  an  employee  could,  with 
reasonable  safety,  work  upon  them  when  the  current  is  on. 

Every  precaution  must  be  taken  to  keep  moisture  or  water 
from  a  switchboard,   since  this,  of  course,  will  result   in  a  short- 


ELECTRICAL  YIRE   HAZARDS  J5 


circuit,  as  we  are  forced  to  have  more  or  less  unprotected  con- 
tacts. Again,  we  have  a  h^rge  number  of  conductors  centering 
at  these  boards,  and  it  is  essential  that  the  insulation  of  the  con- 
ductors should  be  protected,  so  that  if  a  flame  does  occur  on  the 
board,  it  will  not  readily  extend  to  the  conductors.  Orderliness 
and  cleanliness  are  especially  essential  about  a  switchboard,  as  the 
presence  of  dust  carries  with  it  more  or  less  metallic  particles 
which  are  liable  to  cause  a  short-circuit. 

These   are  regulators  and   may   be    likened   somewhat  to  the   Resistance 
throttle  valve  of  an  engine.      Thev  are  considered  as  a  source  of   Boxes  and 
heat,  and  should  be  so  arranged  that  even  if  overheated  they  can-   Equalizers, 
not  cause   injury  to  surrounding  objects.     The  burning   out   of  a 
rheostat  may  result  in  a  flame  or  flash,  and  oftentimes  melted  solder 
or  other  material  is  thrown  off,  which,  if  it  can  come  in  contact  with 
combustible  material,  will  start  a  fire. 

As  the  name  implies,  a  lightning  arrester  is  a  device  designed   Lightning 
to  remove  or  divert  atmospheric  disturbances  from  the  lines.     They   Arresters, 
must  be  constructed  of  non-combustible  material,  and  must  offer  an 
easy  path  for  the  lightning  from  the  wires  to  the  ground. 

As  will  be  noted,  they  are  to  be  located  in  a  readily  accessible 
place,  this  for  the  reason  that  it  is  necessary  for  them  to  be  fre- 
quently inspected  and  adjusted.  These  arresters  must  always  be 
connected  with  a  thoroughly  good  and  permanent  ground  connec- 
tion, and  this  ground  wire  must  be  run  as  free  as  possible  from 
kinks,  coils  and  sharp  bends.  The  ground  connection  should  not 
be  connected  to  gas  pipes,  as  there  is  always  a  liability  of  a  very 
severe  discharge,  which,  ^vith  a  gas  service,  may  result  in  igniting 
the  gas,  and  thus  causing  an  explosion. 

All  circuits  should  be  arranged  that  thev  may  be  tested  as  to   Testing  of 
their  freedom  from  grounds.    A  continuous  operating  detector  con-   Insulation 
sists  of  two  lamps  connected  in  series  across  the  line  with  a  ground   f^^sistance. 
connection  between  them. 

Motors  are  very  generally  used  in  manufacturing  and  mercantile  Motors. 
establishments  and  for  almost  an  infinite  number  of  uses.  In  man- 
ufacturing establishments  they  supply  the  power  for  entire  rooms, 
run  elevators,  hoists,  cranes,  and  present  practice  now  provides  for 
the  larger  machines  to  be  supplied  by  a  separate  motor,  thus  doing 
away  with  numerous  belts  and  shafting.  In  mercantile  establish- 
ments they  are  used  for  elevators,  coffee  grinders,  sewing  machines, 
and  the  like.  In  hotels  they  are  used  for  making  bread,  washing 
machines,   vacvium    cleaners,   etc.     As    a  general  thing,  it  is  nee- 


t6  LECTURES  ON  FIRE  INSURANCE 


Motors.  essary  for  the  average  motor  to  be  placed  in  a  clean,  dry  place, 

although  motors  designed  to  operate  out  of  doors  and  where 
moisture  is  present  are  built.  These  latter  motors  are  obliged  to 
be  enclosed,  and,  therefore,  are  more  expensive  and  do  not  have 
the  capacity  of  the  motors  where  ample  ventilation  may  be  pro- 
vided. Except  when  unavoidable,  motors  should  never  be  located 
in  dusty  or  Hnty  places,  and  when  so  located  should  be  of  enclosed 
type  or  located  in  a  separate  room.  This  room  should  be  largely 
of  glass,  so  that  the  condition  of  the  motor  may  be  noted  from  the 
outside. 

Quite  a  sharp  line  is  drawn  between  motors  which  operate  at 
a  potential  of  550  volts  and  motors  which  operate  at  a  potential 
above  this  voltage.  Owing  to  the  potentials  of  the  circuits  used  at 
the  present  time,  when  it  is  necessarv  to  use  a  motor  of  over  550 
volts  potential,  it  is  usually  built  for  a  potential  of  2,'JOO  volts 
'or  over:  /.  ^.,  there  are  but  few  motors  operating  at  a  potential 
between  these  two  voltages.  While  the  wiring  for  a  motor  oper- 
ating at  550  volts  may  be  supported  on  porcelain,  when  we  go 
above  this  voltage  an  approved  conduit  system  is  required.  This 
conduit  system  is  to  be  connected  to  the  motors,  starting  devices 
and  switches;  /.  e.,  there  is  practically  no  exposed  wiring.  It  is 
felt  that  should  it  be  deemed  necessary  for  operating  conditions  to 
install  motors  above  550  volts,  it  was  not  too  much  to  ask  that  a 
form  of  construction  which  will  provide  for  the  greatest  amount  of 
protection  to  the  wires  and  devices  should  be  provided. 

The  wires  for  motor  circuits  must  be  of  sufficient  size  that 
they  can  care  for  the  starting  current,  which  is  always  in  excess  of 
the  full  load  running  current.  For  this  reason  we  require  that  the 
leads  or  branch  circuits  must  be  designed  for  at  least  25  per  cent 
in  excess  of  the  full  load  of  current  of  the  motor,  in  order  to  provide 
for  this  starting  current. 

The  protective  devices  for  motors  are  especially  necessary, 
since  the  load  is  usually  thrown  on  and  off,  and  this  load  may  often- 
times be  in  excess  of  that  for  which  the  motor  is  designed.  Circuit 
breakers  are  recommended  with  motors,  in  order  that  when  this 
overload  does  come  on,  and  the  breaker  opens,  the  ser^■ice  can 
more  easily  be  put  again  into  commission.  It  will  be  noted  that 
the  starting  device  for  the  motor  must  be  located  in  sight  of  the 
motor,  except  where  special  authority  is  given  to  deviate  from  this 
rule.  As  can  be  readily  understood,  it  is  not  usually  considered 
safe  for  a  motor  to  be  started  with  the  operator  not  in  sight  of  the 


ELECTRICAL  FIRE  HAZARDS  J7 

motor,  in  order  that   if   there  is  any  deran<^ement  of  the  shafting,    Motors, 
belting,  etc.,  he  will  be  in  a  position  to  stop  the  motor  before  serious 
damage  has  been  done. 

Rheostats  are  used  with  direct  current  motors  for  starting  and 
controlling  the  speed  of  motors.  As  noted  previously,  they  must 
be  treated  as  sources  of  heat,  and  located  so  as  to  be  away  from 
combustible  material.  Motor  starters  for  direct  current  machines 
should  also  be  provided  with  a  no-voltage  release.  This  in  its 
simplest  form  is  a  magnet  across  the  line  which  holds  the  lever 
arm  of  the  rheostat.  When  the  current  fails,  the  lever  arm  is  drawn 
back  by  a  coiled  spring. 

With  alternating  current  motors  the  starting  device  is  con- 
structed somewhat  different  than  for  a  direct  current  motor,  and 
has  somewhat  the  form  of  a  transformer.  These  starting  devices 
(or  auto  starters  as  they  are  called)  should  preferably  be  constructed 
so  that  the  operator  cannot  leave  them  in  a  position  where  any 
current  passes  through  the  starting  de\ices.  These  de\  ices  are 
usually  oil  immersed,  so  that  incase  of  trouble  there  is  considerable 
combustible  material.  In  general,  motor  starters  either  for  D.  C. 
or  A.  C.  circuits  present  the  hazards  of  switches  and  possibly  of 
overheated  coils,  and  must  be  treated  accordingly. 

Practically  all  of  these  power  plants  operate  with   a   ground   Railway 
return  so  that  in  case  of  a  ground  on  any  feed  wire,  we  have  a  dead   Power 
short  circuit.     For  this  reason  and  on  account  of  the  load  carried   ^*^*'°"s* 
the  protective  device  must  be  of  the  circuit  breaker  type. 

A  storage  battery,  as  its  name  implies,  is  one  where  energ\-  is   Storage  or 
stored,  and  is  charged  liy   passing   direct  current   from  a  dynamo   P"n^ary 
through  it.      It  always  gives  out  direct  current  in  the  reverse  order   "^**^"^^' 
from  which  it  was  charged.     Primary  batteries  are  very  limited  in 
their  capacity  and  are   used   chiefly  for  signalling   systems   when 
current  from  dynamos  is  not  available. 

Storage  batteries  are  used  principally  to  assist  a  station  during 
what  is  known  as  the  "peak  load."  The  Edison  Company  use 
very  large  batteries,  these  operating  at  about  250  volts  potential. 
Batteries  are  also  used  on  railway  work  at  600  volts  potential.  A 
distinctive  feature  about  a  battery  is  the  fact  that  it  can  deliver  for 
a  short  period  an  overload  far  in  excess  of  its  normal  load. 

As  practically  all  of  the  batteries  in  use  contain  sulphuric  acid, 
it  is  necessary  to  provide  in  the  battery  rooms  for  the  protection 
against  corrosive  vapors.  These  battery  rooms  should  also  be 
thoroughly  ventilated  so  that  the  fumes  may  be  carried  to  the  out- 


18 


LECTURES  ON  HRE  INSURANCE 


Trans- 
formers. 


Class  B.- 
Ootside 

Work. 


Necessity 
for  Care. 


side  air.  The  water  and  acid  used  in  the  battery  rooms  require  that 
the  wires  should  be  especially  well  insulated.  Where  we  have  had 
fires  in  storage  battery  rooms  the  losses  ha\  e  usually  been  severe. 

The  most  of  the  transformers  used  in  central  or  sub-stations 
contain  oil  for  insulation  and  cooling.  As  the  amount  of  oil  in  the 
larger  sizes  is  considerable,  and  as  it  will  cause  a  very  hot  fire, 
should  it  become  ignited,  it  is  necessary  to  so  locate  these  trans- 
formers that  in  case  of  a  burn  out  the  burning  oil  or  insulation  will 
not  endanger  the  balance  of  the  plant. 

Outside  wires  may  be  a  menace  to  buildings  in  sev^eral  ways. 

1st.  By  producing  abnormal  conditions  on  the  inside  wiring, 
as  when  one  wire  becomes  grounded,  there  being  a  ground  on 
another  wire  of  this  circuit  inside  the  building;  a  short  circuit  of 
wires  outside  causing  the  fuses  inside  to  blow. 

2d.  By  the  crossing  of  a  high  potential  wire  with  a  low 
potential,  the  cross  being  when  one  wire  of  the  high  tension  circuit 
touches  or  comes  in  contact  with  a  wire  of  the  low  potential  circuit. 
As  an  example  I  might  cite  the  case  of  a  2,200  volt  circuit  wire 
becoming  crossed  with  a  110  volt  circuit.  The  fixtures  would 
probably  break  down,  fuses  would  blow,  but  as  the  potential  is  far 
in  excess  of  what  the  fuses  are  designed  to  open,  arcs  would  be 
established  and  fires  might  be  started.  Another  example  is  for  a 
telephone  wire  to  become  crossed  with  a  lighting  circuit  wire 
either  of  high  or  low  potential,  and  unless  proper  protection  for 
these  signalling  wires  is  pro\  ided  at  the  entrance  of  the  wires  to  the 
building,  arcs  or  grounds  are  liable  to  be  established  which  may 
start  fires. 

3d.  By  the  high  tension  wires  coming  in  contact  with  build- 
ings, starting  arcs  or  grounds  through  damp  woodwork  or  rain  con- 
ductors, flashing,  etc. 

For  these  reasons  it  is  especially  important  for  these  outside 
wires  to  be  run  in  a  most  substantial  and  careful  manner.  As  can 
be  readily  understood,  the  best  way  is  to  have  all  outside  wires 
underground,  the  lighting  and  power  circuits  being  carried  in  one 
set  of  conduits,  the  signalling  (telephone,  telegraph,  district  mes- 
senger, etc.)  wires  being  carried  in  another  set  of  conduits,  separate 
manholes  being  provided  for  each  set.  This  is  very  expensive  and 
can  only  be  recjuired  in  cities  of  the  first,  and  under  special  condi- 
tions of  the  second  class. 

The  next  best  method  is  to  require  the  lighting  and  power 
wires  to  be  run  on  separate  sets  of  poles  from  the  signalling  wires, 


ELECTRICAL   FIRE   HAZARDS  19 


one  set  occupying  one  side  of  the  street,  the  other  set  the  other  side. 
There  are  cases,  however,  where  it  is  necessary  to  run  both  light 
and  power  and  signalling  wires  on  the  same  set  of  poles.  In  such 
cases  the  signalling  wires  should  not  be  placed  on  the  same  cross- 
arm  with  electric  light  and  power  wn-es. 

Standard  practice  requires  outside,  or  line  wires  as  they   are   Outside 
called,  to  be  insulated  with  three  cotton  braids  impregnated  with  a   Wires, 
moisture  repellent.     This  covering  is  depended  upon  for  accidental 
contact  but  not  for  insulation  proper,  the  wires  being  supported  on 
glass  or  porcelain  petticoat  insulators. 

The  tie  wire  should  have  the  same  insulation  as  the  wire  itself, 
as  a  further  protection.  While  ru]:)ber  insulation  may  be  used  it  is 
expensive  and  in  a  few  years  will  probably  be  no  better  than 
weatherproof.  All  joints  should  be  well  made  and  soldered,  as  an 
unsoldered  joint  may  corrode  and  burn  the  wire  off. 

Where  wires  are  supported  on  buildings  they  should  be  at 
least  seven  feet  above  flat  roofs  and  one  foot  above  peak  roofs. 
The  supporting  structures  should  be  of  substantial  design,  and  so 
that  when  the  wires  are  loaded  with  sleet  or  when  under  a  severe 
wind  pressure  they  cannot  come  in  contact  with  the  building. 

Service  wires  are  the  wires  brought  into  the  buildings  to  sup- 
ply the  lights  or  power  in  a  building.  That  portion  of  the  service 
wire  from  the  last  outside  support  into  the  building  is  to  have  rub- 
ber insulation  as  an  extra  precaution.  One  method  used  to  bring 
these  wires  into  a  building  is  to  have  them  enter  through  bushed 
holes.  Another  method  is  to  bring  the  two  or  more  wires  through 
a  metal  conduit,  this  conduit  extending  from  basement,  where  the 
wires  enter,  up  the  side  of  the  building,  well  out  of  the  reach  of 
persons.  At  the  upper  end  a  fitting  known  as  a  "pipe-cap"  is 
provided,  which  protects  the  wires  from  moisture. 

W^here  lead  covered  cables  are  strung  overhead  the  outside 
sheath  should  be  grounded,  since  any  breakdown  of  insulation  will 
make  alive  this  outside  sheath.  Trolley  wires  must  be  of  ample 
strength  and  so  arranged  that  they  can  be  disconnected  at  the  power 
station  or  divided  into  sections  so  as  not  to  interfere  with  the  work 
of  the  firemen. 

Where  an  electric  current  is  passed  through  a  liquid  not  an  ele-   Electrolysis, 
ment  the  liquid  is  decomposed.     For  example,  when  a  current  passes 
through  water,  hydrogen  and  oxygen  are  liberated.     Whenever  a 
current  passes  from  a  wire  or  pipe  to  the  damp  ground  an  electro- 
chemical action  takes  place,  which  in  time  may  destroy  the  pipe. 


20 


LECTURES  ON  FIRE  INSURANCE 


High 

Tension 

Lines. 


In  places  near  lar*i;e  central  stations  in  cities  this  corrosive  effect 
is  most  noticeable.  Since  alternating  currents  reverse  their  direction 
very  rapidly,  the  chemical  effects  are  reversed  so  that  the  damage 
from  such  currents  is  slight. 

The  Code  states  the  following  causes  of  fire  which  may 
come  from  high  voltage   (over  5,000  \olt)  lines. 

"  Accidental  crosses  between  such  lines  and  low  potential 
lines  may  allow  the  high  voltage  current  to  enter  buildings  o\er 
a  large  section  of  adjoining  country.  Moreover,  such  high 
voltage  lines,  if  carried  close  to  buildings,  hamper  the  work  of 
firemen  in  case  of  fire  in  the  building.  The  object  of  the  rule 
is  so  to  direct  this  class  of  construction  that  no  increase  in  fire 
hazard  will  result,  while  at  the  same  time  care  has  been  taken 
to  a\oid  restrictions  which  would  unreasonably  impede  prog- 
ress in  electrical  development. 

''  It  is  fully  understood  that  it  is  impossible  to  frame  rules 
which  will  cover  all  conceivable  cases  that  may  arise  in  con- 
struction work  of  such  an  extended  and  varied  nature,  and  it  is 
advised  that  the  Inspection  Department  having  jurisdiction  be 
freely  consulted  as  to  any  modification  of  the  rules  in  particu- 
lar cases." 


The  best  way  to  guard  against  accidental  contact  between  such 
lines  and  other  lines  is  to  run  them  by  separate  routes.  This  is  not 
always  possible  and  it  may  be  necessary  for  these  lines  to  cross  each 
other,  and  when  necessary  special  precautions  must  be  taken  to  pre- 
vent contact  between  the  two  lines. 

Transformers  should  be  kept  outside  of  buildings  where  pos- 
sible to  do  so  ;  first,  because  by  so  doing  it  keeps  the  high  tension 
wires  out  of  the  building,  and  second,  because  when  a  transformer 
burns  out  the  smoke  (from  oil  usually  contained  in  the  trans- 
formers) is  kept  out  of  the  building. 

Very  much  discussed  question  for  last  few  years.     It  is  gener- 

^'^"."^      ally  conceded,   however,  that  the  grounding  of  secondary  circuits 
Secondary  ^  ^~  '  r      ,,  i  ,         i  •   , 

Circuits.  prevents    90    per    cent    to   9o  per   cent  of  all    troulile  which  may 

result  by  tlie  crossing  of  high  potential   circuits  w  ith  low  potential. 


Trans- 
formers. 


ELECTRICAL  FIRE  HAZARDS  21 


LECTURE  III. 

This  evening  we  propose  to  take  up  the  rules  for  Inside  Work, 
which  are  contained  in  Class  C  of  the  Code.  Under  Inside  Work 
are  included  all  of  the  rules  for  wiring  for  light,  heat  and  power. 
They  do  not  cover  the  rules  for  Signalling  Systems,  such  as  tele- 
phone, telegraph,  fire  alarm,  and  the  like,  as  these  circuits  do  not 
present  hazards  in  themselves,  being  hazardous  only  from  being 
crossed  with  light,  heat  or  power  wires,  or  on  account  of  lightning 
discharges. 

The  present  methods  of  inside  wiring  are  the  result  of  a  "cut 
and  try  "  method  for  the  past  twenty  years.  Originally  the  supports 
for  the  wires  were  of  wood,  and  the  cut-outs,  switches,  hanger 
boards,  etc.,  were  also  of  wood.  These  wooden  fittings  and  devices 
have  been  gradually  eliminated,  until  at  the  present  time  nothing 
but  marble,  slate  or  porcelain  fittings  are  permitted.  The  rules 
have  been  gradually  extended  to  take  into  account  the  new  forms  of 
construction  and  appliances  which  have  been  developed  during 
these  years. 

In  our  larger  properties,  such  as  ofhce  buildings,  theatres, 
churches,  mills,  etc.,  the  electrical  installations  are  very  carefully 
planned  at  the  time  the  general  plans  of  the  buildings  are  drawn, 
these  plans  being  prepared  by  electrical  engineers  acting  under  the 
architect's  instructions.  The  load  in  the  building,  the  method  of 
distribution  and  the  running  of  the  wires  are  very  completely 
arranged,  in  order  that  there  may  be  the  greatest  efliciency  and 
economy.  With  the  smaller  buildings,  however,  this  supervision 
cannot  be  given,  and  the  wiring  oftentimes  is  an  afterthought. 
Frequently  the  work  is  given  to  the  lowest  bidder,  and  naturally 
we  have  cheap  construction.  However,  the  general  tendency  is  for 
an  improvement  of  all  electrical  installations,  and  with  the  super- 
vision which  is  being  given  by  municipalities  and  by  the  under- 
writers, as  a  whole  our  installations  are  remarkably  safe,  and 
comparatively  few  fires  at  the  present  time  are  caused  by  defective 
electrical  installations. 

At  the  last  lecture  slides  were  shown  showing  two  methods  for  Services, 
service  wires  to  enter  buildings.  One  was  where  each  wire  enters 
the  building  through  separate  bushed  holes,  and  the  other  was  where 
the  low  tension  wires  entered  through  a  conduit,  this  conduit  usually 
extending  into  the  basement.  Comparatively  few  high  tension  cir- 
cuits are  at  present  in  use  inside  of  buildings.  There  are,  however, 
a  few  series  arc  light  circuits  which  are  used  in  stores  and  in  fac- 


22  LECTURES  ON  FIRE  INSURANCE 


Services.  tories,  but  these  are  gradually  being  discontinued  and  the  low  ten- 
sion circuits  substituted.  Where  we  have  arc  light  circuits  entering 
buildings  it  is  necessary  to  pro\  ide  a  service  cut-out  which  will  not 
only  disconnect  the  wires  but  will  short  circuit  the  wires  on  the  out- 
side, since  it  is  necessary  to  maintain  the  continuity  of  the  circuit. 

These  circuits  almost  always  enter  overhead,  and  rarely,  if 
e\  er,  are  run  underground.  With  light  or  power  low  tension  ser- 
vices these  should  almost  always  enter  in  the  basement,  as  they  are 
more  accessible  in  this  location,  and  it  is  also  a  much  more  desirable 
location  for  the  meters  than  on  the  second  or  third  floor.  In  the 
earlier  days  it  was  customarv  for  a  large  proportion  of  the  service 
wires  to  enter  in  inaccessible  places,  such  as  attics  and  lofts,  but 
present  day  practice  is,  as  I  said  before,  to  have  them  enter  in  the 
basement. 

With  constant  potential  circuits  a  main  switch  should  be  pro- 
vided immediately  at  the  entrance  of  the  wires  and  ins'de  of  the 
building,  so  that  in  case  of  fire  or  accident  all  the  wiring  inside  of 
the  building  may  be  disconnected.  Main  fuses  must  also  be  pro- 
vided at  the  service  entrance,  these  fuses  being  placed  ahead  of  the 
switch  and  so  arranged  that  when  they  open  all  portions  of  the  wir- 
ing bevond  them  will  be  dead.  These  service  fuses  and  switches 
when  of  small  capacity  usually  consist  of  so-called  plug  fuses  and  a 
small  knife  switch.  When  of  the  larger  capacities  we  may  have  a 
marble  or  slate  switchboard  placed  in  a  room  specially  designed  for 
the  purpose,  to  which  the  lighting  and  power  feeders  are  connected 
with  separate  fuses  and  switches  to  control  these  power  and  lighting 
circuits. 
Underground  Where  imderground  conductors  are  used  it  is  practically  neces- 

Condoctors.  sary  for  the  wires  to  enter  the  basement.  The  tubes  through  which 
these  wires  enter  should  be  tightly  closed  with  asphaltum  or  some 
other  non-conductor,  to  prevent  the  gases  always  prevalent  in  the 
street  from  entering  around  the  wires.  We  also  do  not  wish  more 
than  one  underground  service  from  a  subway  to  supply  more  than 
one  building,  as  it  is  not  advisable  to  have  several  buildings  fed 
through  one  building,  as  it  is  then  necessary  to  enter  this  building 
having  the  general  service  in  order  to  cut  off  the  current  in  another 
building. 
General  It  will  be  noted  that  no  smaller  wire  than  No.  14  B.  &  S.  gauge 

Rules— All     is  permitted  except  in  fixtures.     This  is  not  on  account  of  the  carry- 
Voltages,        jpg  capacity  of  the  wires,  but  is  principally  on  account  of  mechani- 
cal strength,  it  not  being  deemed  advisable  to  use  any  wires  smaller 


ELECTRICAL  FIRE  HAZARDS  23 


than  this  size.     Joints  and  splices  should  be  carefully  made,  the   General 
joint  being  both  mechanically  and  electrically  secure  without  solder,    Rules. 
then  soldered  and  covered  with  an  insulation  equal  to  that  of  the 
wires. 

When  not  in  approved  conduit  the  wires  must  be  separated 
from  walls,  floors,  timbers,  etc.,  by  non-combustible  insulating  tubes, 
such  as  glass  or  porcelain,  and  kept  free  from  contact  with  pipes  or 
conducting  material.  These  tubes  and  bushings  are  required  with- 
out reo-ard  to  the  type  of  insulation,  and  should  be  sufficient  to 
furnish  the  necessary  protection  to  the  wires  even  if  there  was  no 
insulation  on  them.  These  rules,  of  course,  do  not  apply  to  wiring 
of  fixtures,  there  being  special  rules  for  such  work.  In  damp  places 
wires  should  be  so  supported  that  the  water  from  the  pipes  cannot 
drop  onto  the  wires,  and  on  this  account  it  is  recommended  that  the 
wires  be  above  rather  than  below  the  pipes. 

The  table  giving  the  safe  carrying  capacity  for  the  different  Carrying 
sizes  of  wires  was  prepared  a  number  of  years  ago,  after  very  care-  Capacity. 
ful  experiments.  It  will  be  noted  that  the  safe  carrying  capacity 
for  wires  having  other  than  rubber  insulation  is  somewhat  higher 
than  that  where  rvibber  insulation  is  used,  this  for  the  reason  that 
rubber  will  deteriorate  under  high  temperature.  This  table  applies 
to  inside  work  only.  With  about  three  times  the  capacity  as  called 
for  in  these  tables  ordinary  insulation  will  smoke,  this  being  the 
margin  of  safety  provided,  and  is  none  too  large  considering  that 
often  wires  must  be  run  in  places  having  fairly  high  temperatures, 
such  as  boiler  rooms,  basements,  etc.  This  table  of  carrying  capac- 
ity is  sometimes  confused  with  the  question  of  drop,  some  wiremen 
thinking  that  if  they  use  a  wire  large  enough  so  as  to  keep  inside  of 
the  allowable  capacity  it  will  be  ample,  regardless  of  the  distance 
the  circuit  is  run. 

Let  us  take  an  example  of  a  dynamo  driving  a  motor.  Assume  Drop, 
that  the  dynamo  is  250  feet  from  the  motor,  making  a  total  of  500 
feet,  250  out  and  250  in.  Assume  that  the  motor  takes  90  amperes 
at  220  volts.  The  smallest  wire  permitted  for  90  amperes  with 
rubber  insulation  is  No.  2.  Now  while  No.  2  wire  is  perfectly 
satisfactory  as  far  as  the  heating  of  the  wire  is  concerned,  suppose 
we  want  only  1%  loss  or  a  drop  oi  I'^fo   i'l  these  wires.     Then  our 

loss  in  the  wires  must  not  be  in  excess  of   2.2  volts.     Now  if  Q  =  — 

then  the  current  of  90  amperes  equals  2.2  divided  by  the  resistance, 
or  the  resistance  of  500  feet  of  wire  must  not  be  in  excess  of  .02 


24 


LECTURES  ON   FIRE  INSURANCE 


Switches, 
Cut-outs  and 
Circuit 
Breakers. 


Constant 

Current 

Systems. 


Constant 
Potential 
Systems. 


Automatic 
Cut-outs. 


ohms.  From  a  suitable  wire  table  we  find  that  this  wire  must  be 
No.  0000  instead  of  No.  2,  or  five  sizes  larger  than  that  required,  on 
account  of  the  heat  and  having  a  safe  carrying  capacity  of  210 
amperes.  There  are  cases,  of  course,  where  the  distance  between 
the  dynamo  or  the  center  of  distribution  and  the  load  is  short  and 
where  a  smaller  wire  than  that  required  on  account  of  the  heating 
effect  might  be  used  and  keep  the  "drop"  within  reasonable  limits. 

The  Code  requires  that  switches  and  cut-outs  should  ne\er 
be  located  in  the  vicinity  of  easily  ignitible  stuff  or  where  exposed 
to  inflammable  gases  or  dust,  or  to  the  flyings  of  combustible  mate- 
rials. In  the  case  of  switches,  when  the  switch  is  thrown  there  is 
more  or  less  of  an  arc,  which  would  ignite  flyings  of  combustible 
materials  or  gases.  While  our  enclosed  fuses  should  blow  without 
a  flash  it  is  not  considered  safe  to  permit  them  in  these  locations, 
owing  to  the  possibility  of  the  fuse  "  going  bad,"  as  it  were,  when 
it  is  called  upon  to  operate. 

As  I  stated  a  few  minutes  ago,  these  are  used  but  little  in  build- 
ings, and  are  almost  always  used  for  the  lighting  of  streets,  etc.  As 
the  potential  of  the  circuits  varies  from  2,000  to  4,000  volts,  it  is 
necessary  for  the  wires  to  be  carefully  insulated,  and  only  the  very 
best  of  rubber  covered  wire  should  be  used.  The  present  make  of 
arc  lamps  are  enclosed,  and  therefore  there  is  but  little  danger  from 
sparks  falling  from  the  carbons,  as  was  the  case  a  number  of  years 
ago  with  the  old  open  lamp. 

Constant  potential  systems  are  divided  into  three  classes,  known 
as  low  potential  systems,  550  volts  or  less  ;  high  potential  systems, 
550  to  8,500;  and  extra  high  potential  systems,  over  o,500  volts. 

The  most  common  potentials  used  at  the  present  time  for  light- 
ing and  power  are  110  volt  two-wire  direct  current  systems  ;  220  volt 
three-wire  direct  current,  there  being  110  volts  between  the  neutral 
and  either  outside  wire  ;  500  to  550  volt  direct  current  for  street  rail- 
way work,  these  with  a  ground  return;  220  to  550  voU  alternating 
current  power  circuits.  We  have,  however,  some  installations  where 
2,200  volt  motors  are  in  use,  but  these  are  only  met  with  infre- 
quently. 

Almost  all  of  the  isolated  plants,  such  as  the  building  where 
we  are,  have  direct  current,  the  system  in  use  in  this  building  being 
a  three-wire  220  volt,  which  has  been  converted  into  a  two-wire  110 
volt  bv  putting  the  outside  wires  in  multiple. 

Where  practicable  it  is  better  to  group  these  cut-outs  so  as  to 
make  their  inspection  and  maintenance  easier,  and  also  on  account 


ELECTRICAL  FIRE  HAZARDS  25 


of  usually  being  able  to  find  a  safer  location  than  when  they  are   Automatic 
scattered  over  a  building.     It  is  also  better  to  enclose  the  cut-outs   Cut-outs, 
in  cabinets,  so  that  if  a  fuse  does  go  wrong  it  can  cause  no  trouble. 

For  general  wiring  we  require  that  no  set  of  incandescent 
lamps  consuming  o\er  660  watts  shall  ultimately  be  dependent  upon 
one  cut-out.  By  this  we  mean  that  the  first  fuse  from  the  lamps 
going  towards  our  source  of  supply  shall  not  exceed  this  amount. 

Beyond  these  fuses  working  towards  the  source  of  supply  we 
require  that  all  wires  shall  be  protected  by  fuses  so  that  the  safe 
carrying  capacity  may  not  be  exceeded.  An  exception  to  this  rule 
may  be  noted  for  three-wire  direct  or  alternating  current  systems 
with  grounded  neutral.  It  is  felt  that  with  such  systems  we  may 
omit  the  fuse  in  the  neutral  wire,  provided  both  wires  of  the  ultimate 
branch  circuits  controlling  the  lights  are  properly  protected  by  fuses. 

Service  switches  are  almost  always  of  the  knife  blade  type.  Switches, 
and  except  for  the  smaller  sizes,  which  are  mounted  on  porcelain, 
are  mounted  on  slate  or  marble  bases.  A  single  throw  switch  is 
one  having  one  set  of  contacts,  a  double  throw  being  where  there 
are  two  sets.  Single  throw  switches  should  be  placed  so  that  the 
gravitv  will  tend  to  open,  and  so  that  the  blades  of  the  switch  when 
open  will  be  dead. 

Switches  controlling  motors,  and  where  the  current  is  above 
'20  amperes,  are  usually  of  the  knife  blade  type.  Surface  snap 
switches  are  circular  in  form,  mounted  on  a  porcelain  bases  and 
having  a  metal  covers,  the  handles  being  in  the  center  of  the  covers. 
They  should  be  mounted  out  from  the  wall  on  sub-bases,  so  that 
the  wires  may  enter  at  the  rear  without  coming  in  contact  with  the 
wall  on  which  the  switch  is  mounted.  They  should  usually  be 
mounted  on  a  back  board  behind  the  laths,  so  that  they  will  be  in 
a  secure  position,  the  laths  as  a  general  thing  not  making  a  firm 
support  for  the  switches.  If  it  is  not  possible  to  provide  this  back 
board,  then  they  should  be  set  on  a  wooden  block,  this  wooden 
block  being  screwed  to  the  laths  by  several  screws,  the  switch  being 
screwed  to  the  wooden  block  by  two  screws. 

Flush  switches  are  those  which  are  inserted  in  the  wall,  only 
the  face  plate  and  handle  appearing  beyond  the  line  of  the  wall. 
In  all  cases  these  switches  should  be  mounted  in  iron  boxes,  so 
that  if  the  switch  goes  wrong  no  flash  or  flame  can  extend  outside 
of  the  metal  enclosure.  Flush  receptacles,  these  being  porcelain 
de\  ices  to  which  a  table  lamp,  fan  motor  or  similar  appliances  are 
connected,  should  also  be  mounted  in  iron  boxes. 


26 


LECTURES  ON  FIRE  INSURANCE 


Switches. 


Electric 
Heaters. 


Standard 
Wiring. 


Three-way  switches  are  switches  designed  to  control  lights 
from  one  or  more  points  somewhat  distant  from  each  other.  They 
may  be  of  the  surface  type,  but  are  usually  of  the  flush  type. 

Under  this  heading  are  included  all  devices  in  which  use  is 
made  of  the  heat  developed  by  the  current  (usually  by  causing  it  to 
pass  through  coils  of  wire).  There  are  all  forms  of  cooking 
de^•ices,  from  the  chafing  dish  to  the  large  electric  broiler  in  the 
grill  rooms  of  our  latest  hotels ;  toilet  articles,  such  as  curling 
irons,  etc. ;  pads  to  take  the  place  of  hot  water  bottles :  radiators, 
flatirons,  etc.  All  of  these  present  the  same  hazards  as  other 
heaters  of  equal  capacity,  except  that  the  match  hazard  or  the 
explosion  hazard  (where  gas  is  used)  are  eliminated. 

They  are  to  be  controlled  by  double  pole  cut-outs  and  indi- 
cating switches,  so  that  at  a  glance  it  can  be  determined  whether 
or  not  the  current  is  "on"  or  "  off."  They  are  never  to  be  con- 
cealed without  special  permission,  and  when  concealed  should  be 
so  arranged  that  the  heater  could  burn  up  without  damage  to 
surrounding  objects. 

Portable  heaters  are  much  more  hazardous  than  stationary, 
since  the  latter  may  be  suitably  protected,  while  it  is  not  always 
possible  with  the  former.  The  flatiron  is  one  of  the  portable  class 
which  has  given  us  the  most  trouble.  An  iron  heated  on  a  stove 
or  range  gradually  loses  its  heat  when  left  on  an  ironing  board,  but 
not  so  the  electric  iron,  as  energy  is  constantly  being  supplied  to  it. 

It  is  often  desirable  to  connect  a  small  pilot  lamp  in  multiple 
with  the  heater,  the  lamp  usually  being  colored  red  as  an  indicator 
that  the  heater  is  on.  These  portable  heaters  should  have  specially 
constructed  cord  of  asbestos  yarn,  so  that  the  heat  from  the  device 
will  not  ruin  the  cord,  as  would  be  the  case  if  ordinary  cord  was 
used.  In  factories  where  a  large  number  of  these  portable  heaters 
are  used  pilot  lamps  should  be  pro\ided.  and  these  circuits  con- 
trolled by  switches,  so  that  a  bench,  table  or  section  of  a  room 
may  be  cut  off  when  the  heaters  are  not  in  use.  Unless  flatirons 
are  small,  they  shoidd  not  be  used  on  ordinary  lighting  circuits,  as 
they  overload  such  circuits.  The  fixtures  and  sockets  are  also  not 
substantially  enough  constructed  to  permit  of  the  rough  usage 
which  thev  will  receive  if  these  irons  are  connected  to  them. 

Let  us  now  consider  the  various  methods  which  practice  has 
standardized  for  the  running  of  wires  for  low  potential  systems. 

1.  For  open  work  in  dry  places,  up  to  oOO  \olts  it  is  permitted 
to  support  the  wires  on  cleats  which  raise  the  wire    h    inch  from 


ELECTRICAL  FIRE  HAZARDS  27 


the  surface  wired  over,  the  wires  being  kept  2i  inches   apart,  and   Standard 
for  voltages  between  3U0  and  550  the  distance  is  to  be  1  inch,  the   Wiring, 
wires  being  kept  4  inches  apart.      The  distance  between  supports 
should  not  exceed  4 J  feet,  and  if  the  wires   are  liable  to  be  dis- 
turbed, the  distance  should  be  decreased.      For  such  work  so  called 
slow-burning  insulation  may  be  used. 

2.  For  open  work  in  damp  places  the  supports  must  raise  the 
wire  not  less  than  1  inch  from  the  surface,  the  wires  must  be  kept 
2J  inches  apart  up  to  300  volts,  and  4  inches  apart  for  300  to  550 
volts.  The  distance  between  supports  is  the  same,  4i  feet. 
Rubber  insulation  is  required  for  this  class  of  work. 

3.  Mottldifto-  U^ork.  Wooden  moulding  makes  a  fairly  neat 
job  in  old  buildings  on  plastered  walls  or  ceilings,  and  is  satisfac- 
tory for  dry  places.  Metal  moulding  is  especially  satisfactory 
where  a  comparatively  small  amount  of  energy  (660  watts)  is 
required.     Rubber  insulation  only  is  permitted  in  mouldings. 

4.  Conduit  M^ork.  Here  again  rubber  insulation  is  required, 
since  the  insulation  is  the  only  thing  whiK:h  prevents  grounds  on 
the  conduit  or  a  short  circuit,  as  the  two  or  more  wires  are  usually 
carried  in  the  same  conduit. 

5.  Concealed  Knob  and  Tube  ll^ork.  This  is  the  method 
by  which  quite  a  large  amount  of  concealed  wiring  has  been 
done.  While  its  use  has  been  prohibited  in  Chicago,  New  York, 
and  a  few  of  the  larger  cities,  it  is  the  method  largely  used  in  the 
country  districts.  Here  again  rubber  insulation  is  required  and 
the  wires  are  to  be  supported  on  knobs  which  raise  the  wire  1 
inch  from  the  surface  wired  over,  the  supports  being  not  greater 
than  4i  feet  apart;  they  are  to  be  bushed  through  timbers  by  por- 
celain or  glass  tubes. 

While  the  method  is  open  to  objections,  mechanical  injury 
by  plumbers  or  other  artisans  making  repairs,  it  can  be  installed 
at  comparativelv  small  cost,  is  reasonably  safe,  and  does  tend  to 
drive  out  the  match  hazard.  It  is  much  safer  than  kerosene  or 
gas  that  it  replaces. 

6.  Armored  Cables.  Armored  cables,  as  the  name  implies, 
consists  of  one  or  more  wires  insulated  with  rubber  and  sur- 
rounded by  flexible  steel  armor.  It  is  used  somewhat  as  conduit 
is  used,  but  is  especially  convenient  for  concealed  wiring  when  a 
better  class  of  work  than  knob  and  tube  work  is  desired.  It  is 
inferior  to  conduit  work  in  one  respect,  since  the  wires  cannot  be 
withdrawn  should  it  be  deemed  advisable  to  do  so.     Both  conduit 


28 


LECTURES  ON  FIRE  INSURANCE 


Standard 
Wiring. 


Fixture 
Wiring. 


Sockets. 


Flexible 
Cord. 


Arc  Lamps. 
Low^  Po- 
tential 
Circuits. 


Transformers 
Air  Cooled. 
Inside  use. 


and  armored  cable  installations  are  superior  to  the  other  forms 
mentioned,  since  they  offer  the  maximum  amount  of  mechanical 
protection  to  the  wiring,  and  with  conduit  we  have  a  raceway 
through  which  new  wire  or  larger  wires  may  be  drawn  should  it 
be  desired  to  do  so. 

Fixtures  are  to  be  wired  with  rubber  insulated  wires  and  under 
ordinary  conditions  are  to  be  insulated  from  the  gas  piping  or 
other  grounded  metal  work  of  the  building.  As  can  be  readily 
understood,  the  ordinary  wire  cannot  be  used  in  the  average 
fixture  on  account  of  its  size,  so  that  thinner  insulation  is  per- 
mitted. Under  certain  conditions  fixtures  may  be  attached  with- 
out insulating  joints  from  the  grounded  metal  work,  provided  the 
insulation  of  the  wire  is  the  equivalent  of  that  of  the  general 
wiring  system  and  provided  specially  designed  sockets  are  used. 

The  ordinarv  kev  socket  may  be  considered  as  a  single  pole 
switch,  and  should  not  be  used  where  inflammable  gases  may  exist. 
In  such  cases  the  incandescent  lamp  should  be  surrounded  with  a 
vapor-proof  globe  as  a  protection  to  the  lamp. 

Probably  nothing  connected  with  electrical  installations  has 
been  of  greater  assistance  to  the  art  than  flexible  cord,  and  at  the 
same  time  nothing  has  caused  as  much  trouble  as  its  misuse. 
There  are  two  types  of  cord  for  general  use.  One  consisting  of 
two  stranded  conductors,  each  conductor  insulated  with  rubber  and 
surrounded  with  cotton  braid.  The  other  two  stranded  conductors 
insulated  the  same  as  the  first,  but  the  two  conductors  further  sur- 
rounded by  a  tough  braided  outer  covering.  The  former  should 
be  Used  only  for  pendant  work,  where  not  subjected  to  mechanical 
injurv:  the  later  for  portable  lamps,  motors,  etc.  The  practice 
of  extending  flexible  cord  along  walls  and  ceilings,  and  even 
through  doorways  and  walls  into  adjacent  rooms,  cannot  be  too 
strongly  condemned,  since  the  cord  has  only  a  thin  insulating 
covering  and  there  is  liability  of  short  circuits  and  grounds. 

Where  arc  lamps  are  to  be  used  inside  of  buildings,  common 
practice  provides  for  these  lamps  to  be  supplied  from  the  ordinary 
110  or  220  volts  circuits.  The  lamps  are  treated  the  same  as 
would  be  the  case  were  they  supplied  by  series  circuits,  that  is, 
it  is  necessary  to  provide  them  with  globes  and  spark  arrestors 
and  wire  netting. 

The  use  of  metalized  filament,  such  as  the  Tungsten  and  Tan- 
tclum  lamps,  are  now  in  c]uite  general  use.  Where  these  lamps 
are  connected    directly   to   the    110  volt    circuits,   in  order  to  get  a 


ELECTRICAL  FIRE  HAZARDS  29 


proper  resistance  in  the  filament    it  is  necessary  to  make  this  fil a- Transformers 

ment  of  quite   some    length,  and   thus  make  it   fragile.      On   this   Air  Cooled. 

account  lower  voltage  lamps  than  110  are  often  used,  so  that  we  may   ^"^ide  use. 

have  a  shorter  and  more  rugged   filament.      In  order  to  obtain  the 

proper  voltage   small   air-cooled   transformers   are  used   to  reduce 

the  potential  of  the  circuit  from  110   to   oo  or  27i    volts.      These 

transformers  maybe  installed  inside  of  building,  provided  they  are 

treated   as  resistances  and   are  mounted   on   slate  or  marble  bases. 

The  potential    of   the  primary  of   these  transformers,  however,  is 

not  to  exceed   550  volts,  the  limit   for   low  potential  systems,  and 

the  tranformers  must  not  contain  oil. 


LECTURE  IV. 

I  wish  you   to   consider,  this  c\ening,  certain  types  of  insta  11a- Theatre  and 

tions  which  have  special  features.  t,°^°'^T^     , 

:  ...  Ill-       Picture  Estab- 

A  theatre  and  a  motion  picture  house  are  classed  as  liavmg 

similar  hazards  and  needing  the  same  general  treatment.  \\'hile  it 
is  true  that  a  theatre  is  somewdiat  different  from  the  small  moving 
picture  house,  this  difference  is  in  degree  rather  than  in  kind. 
They  both  have  the  stage  and  dressing  room  hazard  and  these  fea- 
tures must  be  treated  the  same  in  either  case.  The  scenic  effects 
in  the  theatre  are,  of  course,  much  more  extensive  than  a  moving- 
picture  house,  which  may  occupy  the  space  in  a  building  formerly 
used  as  a  store,  but,  on  account  of  their  general  similarity,  they  are 
treated  the  same.  The  rules,  in  brief,  provide  for  the  following  : — 
J^i'rsL — Two  services  for  the  lighting,  one  to  care  for  the  entire 
load,  the  other  of  suthcient  capacity  to  supply  the  emergency  or  exit 
lighting.  This  requirement  affects  the  fire  hazard  only  remotely, 
and  is  to  prevent  a  possible  panic,  as  wovdd  be  the  case  should  the 
entire  lighting  of  the  building  be  interrupted. 

Second. — Only  wiring  in  appro\ed  conduit  or  by  armored 
cable  is  permitted.  As  this  form  of  construction  is  considered  the 
safest,  it  is  felt  that  it  should  be  required  where  a  large  number  of 
people  congregate,  and  this  as  much  for  the  Hfe  hazard  as  the  fire. 
This  type  of  construction  is  required  not  only  for  the  auditorium, 
but  for  the  entire  stage,  including  the  borders,  foots,  bunches  and 
dressing  rooms.  Modern  stage  wiring  is  very  substantially  installed, 
and  temporary  work,  so  frequently  productive  of  trouble  in  the  past, 
has  been  greatly  reduced. 


30 


LECTURES  ON  FIRE  INSURANCE 


Motion 
Picture 
Machines. 


The  motion  picture  machine  is  now  a  part  of  many  theatres, 
and  a  short  description  may  be  of  interest.  Briefly,  it  consists  of 
a  lamp  equipped  with  a  very  strong  arc  light, — in  some  cases 
calcium  or  acetylene  are  used, — and  arranged  with  lenses  to  project 
the  picture  on  a  screen ;  a  carriage  with  proper  sprocket  wheels  for 
moving  the  film  containing  the  series  of  pictures  before  the  light ; 
guides  to  keep  the  film  in  proper  position,  a  crank  for  turning  the 
sprocket  wheels,  and  a  shutter  to  cut  off  the  light  when  the  film  is 
not  in  motion.  The  film  is  wound  from  a  reel  in  a  closed  metal 
magazine  at  the  top  of  the  machine  to  another  closed  metal  maga- 
zine at  the  bottom.  Between  the  light  and  the  film  is  interposed  a 
shutter  which  remains  so  as  to  screen  the  light  from  the  film  until 
the  speed  of  the  film  is  nearly  to  normal,  when  it  is  raised  and  the 
light  can  then  strike  the  film.  When  the  speed  is  reduced  the 
shutter  falls  to  a  position  to  shut  off  the  light.  The  films  are  one 
and  one-third  inches  wide  by  five-thousands  of  an  inch  thick  ;  and 
are  of  various  lengths,  but  average  about  1,000  feet.  They  are 
made  of  pyroxylin,  which  is  about  the  same  as  the  material  we  call 
"celluloid,"  are  very  inflammable,  and  if  heat  of  lamp  remains  on 
the  same  spot  of  a  film  for  only  a  few  seconds  it  will  ignite.  The 
film  is  usually  operated  at  a  speed  to  show  about  18  pictures  per 
second. 

Abroad  motor  driven  machines  are  used,  which  of  course  will 
do  away  with  the  operator,  since  the  machine  can  be  started  and 
allowed  to  nm  to  the  completion  of  the  picture.  This  has  been 
prohibited  in  this  country,  and  I  think  rightly,  since  tliere  is  a  very 
considerable  increase  in  hazard  owing  to  the  liability  of  the  film 
sticking  long  enough  to  become  ignited.  A  belt  may  come  off  and 
thus  stop  the  film.  The  film  may  not  properly  enter  the  lower 
magazine,  or  may  come  in  contact  with  the  resistance  of  the  lamp 
and  thus  ignite.  All  of  these  troubles  should  be  obviated  by  the 
operator. 

While  under  many  conditions  the  machine  might  be  operated 
safely  without  any  further  safeguards,  owing  to  possible  failure  of 
machine,  careless  or  incompetent  operator,  etc.,  it  has  been  found 
necessary  to  enclose  the  machine  in  a  fireproof  booth.  The  booth 
is  usually  made  with  an  angle  iron  frame,  securely  riveted  together, 
for  the  sides  top  and  bottom.  The  sides  and  top  are  covered  with 
asbestos  building  lumber  ri-inch  thick,  securely  riveted  to  the  frame 
work  with  the  joints  over  the  angle  irons.  The  floor  is  made  of 
^-inch  wood  co\  ered  with  j|-inch  asbestos  building  lumber.      Door 


ELECTRICAL  nRE  HAZARDS  31 


for  entrance  and  exit  of  operator  and  openings  through  which  pic-   Motion 
tures  are  thrown  are  made  self-closing.      The  booth  is  vented  by   Picture 
means  of  a  10-inch  galvanized  iron  pipe  leading  from  the  top  of  the   Machines, 
booth  and  extending  outside  the  building,  a  fan  being  placed  in  the 
pipe  to  create  a  draught. 

About  two  years  ago  we  heard  a  great  deal  about  the  non- 
inflammable  film.  Films  were  manufactured  which  did  not  burn 
readily  and  it  was  hoped  that  by  this  time  only  this  type  of  film 
would  be  used.  According  to  an  editorial  in  the  ^narterly^ 
issued  by  the  National  Fire  Protection  Association  in  October,  1911, 
practically  none  of  these  films  are  being  manufactured,  owing  to 
their  increased  cost. 

At  the  present  time  comparatively  few  fires  are  caused  b}'  these 
machines,  owing  to  the  supervision  of  underwriting  and  state  of- 
ficials. A  fire  in  Augusta,  Me.,  recently  burned  four  films,  but 
did  not  extend  outside  of  the  booth. 

In  the  past  there  have  been  many  fires  causing  severe  losses  Car  Wiring 
from  defective  equipment  of  cars,  these  fires  originating  from  the  and  Equip- 
heaters,  overheated    resistances,   or  generally  poor  wiring.      The"^^"*  °^  ^"^* 
rules  aim  to  protect  woodwork  where  exposed  to  fiash  or  severe 
heat  with  asbestos  building  lumber;   to  provide  for  ample  air  space 
around  resistances ;   proper  construction  and  location  of  the  heaters 
in  reference  to  the  woodwork  of  the  car ;   proper  sub-division  and 
fuse  protection  of  the  different  lighting,  air  control  and  heater  cir- 
cuits ;   supporting  the  wires  in  metal  conduit  or  asbestos  building 
lumber  conduit. 

It  is  necessary  to  wire  these  so  that  they  may  be  supplied  by  Car  Houses 
current  from  a  grounded  trolley  circuit.  Two  services  should  be  and  Shops, 
provided,  one  for  trolley  wires,  the  other  for  lighting  and  power, 
and  each  of  these  services  should  be  controlled  by  a  cut-out  switch 
outside,  well  away  from  building.  Trolley  wires  should  be  so  sup- 
ported that  in  case  of  break  they  cannot  reach  the  floor.  It  is  desir- 
able to  have  the  trollev  fed  through  a  circuit  breaker  and  thus  limit 
the  amount  of  current  that  can  be  furnished  the  car  house.  With 
the  lighting  and  power  circuits  modern  practice  is  to  install  them  in 
conduit. 

Lighting  and  power  from  railway  wires  are  prohibited,  except  Lighting  and 
in    railway  property.      These    circuits    are    especially   subjected    to  Power  from 

liffhtnine  disturbances,  and  it  is  therefore  desirable  to  keep  such  cir-  Railway 

.  Wires. 

cuits  out  of  ordinary  property. 


32  LECTURES  ON  FIRE  INSURANCE 


glg^tfjc  Special  features,  bare  collectors,  wires  which  must  he  properly 

Cranes.  supported  and  yet  so  arranged  that  the  collectors  can  make  suitable 

connection  with  them  ;  motors  are  intermittent  and  resistances  are 
therefore    heated   considerably,    requiring  location   to   provide   for 
am):)le  ventilation. 
Transformers  It    is   often   necessary   to  install  these  inside  buildings,  as  for 

Inside  Build-  example  a  large  country  residence  set  in  from  street,  where  over- 
*"^^*  head  wires  would  he  unsightly.      Under  such  conditions  it  is  often 

more  economical  from  an  installation  point  of  view  and  also  for 
operating  conditions,  to  bring  the  primary  wires  to  the  building  and 
locate  a  transformer  inside.  The  transformer  should  be  placed  in 
fireproof  vault,  constructed  of  brick  or  concrete,  ventilated  to  outer 
air  or  to  a  flue;  primary  wires  should  directly  enter  the  vault.  In- 
side location  for  transformer  is  not  ad\'isable  where  outside  location 
uiav  be  obtained. 
Fittings,  It  is  not  necessary  to  go  into  the  detailed  specihcations  for  the 

Material  and  construction  and  test  of  rubber  insulated  wires.      The  aim  of  the 
Details  of        specifications  is  to  make  a  wire  which  will  give  a  fairly  long  life. 
Construction.  ^^^^  present  Code  specifications  are  the  result  of  a  study  extending 
over  a  number  of  years  and  are  believed  to  be  very  complete. 

With  metal  conduits,  the  pipe  from  .which  the  conduit  is  made 
must  be  cleared  of  all  burs  and  fins  so  as  to  provide  a  smooth  race- 
way, and  must  also  be  treated  to  prevent  corrosion.  This  may  be 
done  by  galvanizing  or  by  enameling. 

Knife  switches  must  be  designed  to  operate  with  a  bO'/,  over- 
load at  a  voltage  or  pressure  25%  in  excess  of  normal.  Snap 
switches  must  open  and  close  the  circuit  under  full  load  6,000  times 
before  failing. 

Fuses,  the  protective  devices,  must  meet  certain  very  important 
features. 

J7/rst. — They  must  carry  indefinitely  lO'y^  more  than  their 
rated  capacity. 

Second. — They  must  open  with  50 '/p  overload  in  from  1 
to  15  minutes,  depending  upon  their  size,  the  lower  capacity 
opening  in  the  shorter  time. 

Third. — They  must  not  heat  over  a  certain  amount  when 
carrying  their  rated  capacity. 

Fourth. — They  must  open  the  circuit  on  a  short  circuit 
without  throwing  out  molten  metal  or  sparks  so  as  to  ignite 
inflammable  material  near  the  fuse. 

Key  sockets,  as  I  explained  in  a  previous  lecture,  are  really 
single  pole  switches,  and  are   tested  in  a  similar  manner  to  snap 


ELECTRICAL  FIRE  HAZARDS  33 


switches:   /.  e.,  must  make  and  break  their  rated  capacity  6,000 
times  without  failure. 

The  requirements  for  the  construction  and  test  of  rheostats  and 
auto  starters  insures  reliable  pieces  of  apparatus.  They  must  with- 
stand under  test  as  severe  conditions  as  they  are  liable  to  meet  with 
in  practice  without  serious  injury. 

These  systems,  including  telephone,  telegraph,  district  mes-  Signalling 
senger,  call  bell  and  similar  circuits  are  hazardous  only  from  their  Systems, 
liability  to  be  crossed  with  lighting  or  power  circuits,  or  from  light- 
ing. Thev  should  never  be  placed  on  the  same  cross  arm  with 
electric  light  or  power  circuits,  and  should  not  be  placed  on  same 
pole  unless  unavoidable.  When  run  underground  they  should  not 
occupy  the  same  duct  or  manhole  as  electric  light  or  power  wires, 
owing  to  the  liability  of  crosses  with  such  circuits. 

When  these  signalling  wires  arc  run  o\erhead,  they  should  be 
provided  with  suitable  protectors  at  the  entrance  of  such  wires  to 
buildings.  These  protectors  should  be  designed  to  guard  against 
three  sources  of  trouble. 

First. — The  signalling  wire  may  be  crossed  with  another 
signalling  wire  which  may  burn  out  the  instruments.  .Such  a 
cross  is  known  as  a  "sneak"  current.  This  protection  is 
afforded  by  a  fuse  which  will  open  at  a  very  small  current  from 
y?5  to  i  ampere. 

Second. — The  signalling  wire  may  be  crossed  with  a  light 
or  power  circuit.  If  the  potential  of  this  lighting  or  power 
circuit  is  less  than  500  volts,  the  fuse  which  cares  for  the  sneak 
current  will  operate  as  it  is  designed  to  open  the  circuit  at  this 
potential.  If  the  potential  of  the  lighting  or  power  circuit  is 
over  500,  two  things  are  supposed  to  happen,  first,  the  signal- 
ling circuit  is  grounded,  and  second  a  main  fuse  designed  to 
open  a  circuit  at  2,000  volt  potential  operates  and  thus  opens 
the  circuit. 

Third. — Static  charges  due  to  lightning.  When  these 
occur,  the  signalling  circuit  is  grounded  and  the  tension  on  it 
relie\'ed. 

Another    form    of    signalling    system    is    wireless    telegraphy.    "Wireless 
Here  we  have  an  aerial  conductor  made  up  of  a  number  of  bare   Telegraph 
wires  very  well   insulated  which  are  strung  overhead,  and  are  thus    Apparatus, 
liable  to  high  potential  surges  due  to  lightning  or  from  other  causes. 
When  not  in  use  the  aerial  should  be  permanently  and  effectively 
grounded. 

Marine  installations  must  be  especially  well  protected  against   Marine 
moisture,  since  the  salt  air  and  fogs  destroy  ordinary  fittings  and   Installations. 


34  LECTURES  ON  HRE  INSURANCE 

Marine  materials.      Where  fixtures  are  exposed  to  such  action  they  must  be 

Installations,  made  water  tight,  the  lamps  being  protected  by  vapor-proof  globes. 
Generators  for  this  class  of  installations  are  of  the  direct-current  110 
volt  type.  Wires  are  usually  run  in  conduit  or  in  moulding.  A 
number  of  years  ago  lead  encased  cable  was  used  very  extensively 
by  the  U.  S.  Government  in  wiring  of  battleships  and  cruisers. 
The  lead  was  put  on  as  a  protection  to  the  rubber  insulation  against 
moisture.  The  working  and  straining  of  the  ship,  however,  caused 
the  lead  to  crack,  moisture  to  get  in  under  the  lead,  and  in  a  short 
time  the  insulation  was  destroyed.  The  old  cruiser  "Baltimore" 
after  only  three  years  in  service  had  to  be  rewired  on  account  of 
this  trouble. 


QUESTIONS 

1.  a.   Give  the  two  general  ways  that  fires  may  be  caused  by 
electricity  ? 

b.   Give  examples  of  each. 

2.  What  are  the  chief  requisites  for  a  safe  installation? 

3.  a.   What  is  "Direct"  current? 

b.   What  is  "  Alternating"  current? 

4.  a.   Explain  "  Multiple"  connection.     Illustrate, 
b.   Explain  "  Series"  connection.     Illustrate. 

5.  What  special  precautions  should  be  taken  in  the  location 
and  protection  of  a  constant  potential  generator. 

6.  What  precautions  should    be    taken   with  a   switchboard? 

7.  What   are  the    special  points   to  be   considered   in   connec- 
tion with  a  motor  installation? 

8.  What  is  vour  understanding  of  "electrolysis"? 

9.  What  precautions  should  be  taken  as  regards  the  location 
of  cut-outs  and  switches? 

10.  What  advantages  does  the  electric  heater  have  over  the 
gas  heater? 

What  disadvantages  ? 

11.  a.   What  are  the  various  methods  of  running  low  potential 
inside  wires? 

b.   What  class  of  insulation  for  the  wires  is  required  for  each  ? 

12.  What  special  provisions  are  required  for  the  wiring  of  a 
theatre  or  motion  picture  house  ? 

13.  How  many  services  should  be  provided  for  a  car  house? 
Where  should  each  be  located  ? 


ELECTRICAL  FIRE  HAZARDS  35 


BIBLIOGRAPHY 

Associated  Factory  Mutual  Fire  Insurance  Companies:  Rules  for  electric 
light  and  power  equipments,  consisting  of  the  National  Electric  Code, 
with  supplementary  notes.  Latest  Ed.,  II.  Inspection  Department, 
31  Milk  St.,  Boston. 

Blanchard,  R.  E.  :  Electricity.  Six  lectures  delivered  before  The  Fire 
Insurance  Club  of  Chicago.  In  Chemistry  of  Combustion  and 
Electricity— 44-80  pp.  Indianapolis,  1909.  The  Rough  Notes 
Company. 

Devereux,  Washington:  Electrical  Key,  for  use  of  electrical  inspection 
bureaus  in  advising  electrical  contractors,  vviremen,  etc.,  of  cor- 
rections required  so  that  installation  will  conform  to  the  National 
Electrical  Code.     50  p.      Published  by  the  author. 

Goddard,  C.  M.  :  Electricity  from  the  viewpoint  of  the  underwriter.  First 
Annals,  Insurance  Society  of  New  York,  p.  41. 

Goddard,  C.  M.,  and  Crocker,  F.  B.  :  The  National  Electric  Code.  A 
brief  history  of  the  evolution  of  electrical  rules.  Pam.  14  p.  Boston, 
1897. 

Horstmann,  H.  C,  and  Tousley,  V.  H.  :  Electricians'  operating  and  test- 
ing manual.  A  handbook  for  men  in  charge  of  electrical  apparatus, 
repair  men  .   .    .   and  electricians  generally.     II.  365  p.  Chicago,  1910. 

National  Board  of  Fire  Underwriters :  Electrical  Bureau.  Quarterly  fire 
reports  No.  1-55,  Nov.  20,  1893-Apr.  10,  1907.  Discontinued  in  1907. 
Contain  reports  on  electrical  fires. 

National  Board  of  Fire  Underwriters:  Rules  and  requirements  of  the 
National  Board  of  Fire  Underwriters  for  electric  wiring  and  apparatus 
as  recommended  by  the  National  Fire  Protection  Association.  Latest 
edition  1911.      Pam.  190  p.  Boston,  1911. 

Pierce,  Dana :  Underwriters  requirements  for  safe  electric  installations. 
Part  I  and  II.  Instruction  paper,  II.  diagms.  In  American  School 
of  Correspondence  Series.     Chicago,  1911. 

Schoen,  A.  M.  :  Manual  of  electricity.  A  reference  book  for  the  use  of 
fire  underwriters.  348  p.  Louisville,  Ky  ,  1911.  The  Insurance 
Field  Co. 

Sloane,  T.  O'Conor:  Standard  electrical  dictionary.  II.  682  p.  New  York, 
1910.      D.  Van  Nostrand  Co. 

Steeb,  George  Velten:  Electric  light  installations.     Spectator  67:111,  127. 

Woodbury,  C.  J.  H.  :  Electrical  fire  hazard.      Pam.  19  p.  Boston,  1905. 

:   Historv  of  the  National  Electric  Code.      Pam.  9  p.  1906. 


COMMON  FIRE  HAZARDS. 

INTRODUCTION. 

On  approaching  the  subject  of  common  fire  hazards,  one  is 
struck  with  its  seeming  simplicity,  but  on  a  closer  examination  it 
will  be  found  that  this  is  more  apparent  than  real.  The  common 
causes  of  fire  may  seem  commonplace,  but  the  predominance  of 
the  commonplace  is  an  accepted  fact.  While  it  is  more  interesting 
to  study  the  processes  and  hazards  of  some  no\el  but  prominent 
industry,  it  is  important  and  necessary  that  we  should  give  thought 
to  everyday  occurrences,  and  examine  the  hazards  of  these  common 
causes  of  fires  in  considerable  detail,  and  to  recognize  the  impor- 
tance of  such  study.  A  large  percentage  of  fires  in  dwellings  and 
mercantile  propei'ties,  etc.,  is  due  to  common  hazards.  In  fac- 
tories, although  the  largest  number  of  fires  in  some  instances  may 
be  due  to  special  hazards,  the  greatest  proportion  of  large  losses  is 
almost  invariably  due  to  common  hazards  and  exposure. 

Common  hazards  or  common   causes  of    fire  are   those  or-  Common 
dinary  and  universal  conditions  and  operations  that  may  cause  Hazards 
fire  which   are  common  to  a  gfreater  or  less  extent  in  all  classes  Defined, 
and  occupancies  of  property,  irrespective  of  the  special  hazards  of 
that  particular  class,  due  directly  to  the  occupancy  or  work  carried 
on  therein. 

We  may  have  fifty  different  kinds  of  shops,  each  of  which 
presents  some  occupational  hazard  not  met  with  in  the  other,  whicli 
is  rightly  called  a  special  hazard  ;  whei^eas  all  have  the  common 
or  universal  hazard  of  light,  heat,  power,  etc.  The  hazard  due  to 
smoking  or  the  use  of  matches  is  as  potent  and  pre\  alent  in  the 
finest  factory  of  most  intricate  and  specialized  processes  as  in  the 
most  humble  dwelling.  Lightning  is  no  respecter  of  persons  or 
things,  but  strikes  with   equal  impartiality  the  great  barn  bursting 


38 


LECTURES  ON  FIRE  INSURANCE 


Common 
Hazard  -vs. 
Special 
Hazard. 


with  the  grains  of  a  bountiful  harvest  or  an  abandoned  and  weather- 
beaten  grist  mill  of  former  days  which  has  long  since  outlived  its 
utility  or  beauty. 

In  general  there  is  a  clear-cut  distinction  between  the  common 
hazard  and  the  special  hazard.  Occasionally,  howe\  er,  there  may 
be  an  overlapping  that  might  at  first  seem  confusing,  but  which 
should  be  perfectly  clear  when  each  case  is  considered  by  applying 
the  broad  interpretation  of  the  meaning  of  common  hazard.  Con- 
sider, for  example,  a  shoe  shop  which  is  equipped  throughout  with 
electric  motors  which  are  supplied  by  a  current  generated  in  a  small 
detached  boiler  and  power  house,  as  an  adjunct  to  the  plant.  It  is 
clear  that  any  hazard  in  connection  with  the  generator  in  that  power 
house  is  a  hazard  of  power,  a  hazard  common  to  all  classes  of 
plants.  On  the  other  hand,  remove  the  shoe  shop  and  picture  this 
small  power  plant  as  transformed  into  a  large  central  electric 
power  station.  This  station  then  becomes  a  specialized  plant, — a 
manufactory,  in  fact,  of  electric  current  for  general  distribution. 
Then,  according  to  the  definition  of  the  difference  between  special 
and  common  hazards,  the  hazards  in\olved  in  the  electric  generat- 
ing system  are  special  hazards  and  should  be  so  treated. 

There  is  a  natural  tendency  among  those  who  have  had  any 
field  experience,  and  perhaps  especially  the  trained  inspector,  to  be- 
come at  first  most  interested  in  and  concerned  by  the  occupational 
or  special  hazard.  This  is  the  most  impressive  source  of  hazard, 
and  frequently  receives  the  greatest  thought,  to  the  neglect  of  the 
common  hazards.  In  the  nature  of  things,  the  special  hazard  can 
often  receive  more  specific  treatment  than  any  other  with  more 
spectacular  results.  A  notable  example  is  the  segregation  of  the 
picker  hazard  in  the  cotton  mill,  which  at  one  stroke  reduced  the 
special  hazard  of  that  class  from  one  of  the  severest  known  at 
the  time  to  one  of  negligible  consequence  in  underwriting.  The 
same  tendency  of  treatment  is  exhibited  in  the  detached  boiler 
house,  but  still  steam  must  be  introduced  into  tlie  mill.  Power 
must  be  distributed,  and  no  matter  where  the  source  is,  the  hazard 
of  friction  is  ever  present  wherever  a  wheel  turns.  Light  must  be 
carried  to  the  farthermost  recesses  of  the  plant  and  the  system 
possesses  as  much  hazaixl  in  one  location  as  in  another,  and  per- 
force must  be  equal  throughout. 

A  correct  knowledge  of  the  common  causes  of  fire  is  a  very 
necessary  preliminary  to  the  taking  of  effective  measures  for  their 
cessation  or  prevention.     These  causes,  at   first  few  and  simple. 


COMMON   FIRE    HAZARDS  39 


have  grown  into  complex  phases  arising  from  the  multiplication  of 
inventions  and  resources  and  the  introduction  of  new  products  and 
systems  into  commerce.  Only  a  comparatively  few  years  ago 
there  were  no  more  than  two  forms  of  light  or  power  in  use,  while 
now  there  are  a  half  dozen  or  more  forms  of  each  in  common  use. 
The  well  informed  insurance  man,  be  he  an  underwriter  or  engineer, 
agent  or  clerk,  should  therefore  endeavor  to  keep  posted  on  the 
nature  of  these  systems  and  advances,  their  operation  and  hazards, 
so  that  he  can  at  all  times  be  ready  to  give  service  to  his  clients  with 
satisfaction  to  himself. 

By  reference  to  "  Rules  and  Requirements"  is  meant  the  rules   National 
and  requirements  of  the  National  Board  of  Fire  Underwriters  as   Board 
recommended  by  the  National   Fire  Protection  Association,  which   «^ta,nciarcis. 
pertain  to  the  particular  subject  under  discussion.     These  are  issued 
in  small   pamphlet  forms  and  are   freely  distributed  without  cost. 
Those  that  pertain  to  the  particular  subject  vmder  discussion  should 
be  carefully  studied.     By  reference  to  the  "  Lists  of  Appliances  "  is 
meant  the  "  List  of  Gas,  Oil  and  Chemical  Appliances  "  and  "  List 
of  Fire  Appliances,"  which  are  issued  separately  semi-annually  by 
the   National  Board  at  the   recommendation  of  the  L^nderwriters' 
Laboratories,  Inc.     Appro\ed  or  listed  devices  refer  to  the  devices 
which  appear  on  these  lists.      The  Underwriters'  Laboratories'  ap- 
pro\  al  or  label  is  accepted  as  evidence  of  proper  construction  of  the 
appliance  at  the  factory. 

U    LIGHTING 

The  subject  of  light  seems  to  date  from  the  third  verse  of  the 
first  chapter  of  Genesis,  and  it  was  not  very  long  thereafter  before 
the  people  of  that  time  desired  more  light  than  the  God-given  kind, 
and  invented  light  for  themselves. 

One  of  the  oldest  forms  of  illumination  that  is  still  used  is  the  Candles, 
candle,  but  It  did  not  assume  its  present  form  until  the  fourteenth 
century.  In  1484  a  company  was  formed  in  London  for  the  manu- 
facture of  wax  candles.  In  old  fire  records  of  London  during  a 
period  of  thirty-three  years,  and  after  the  introduction  of  gas,  eleven 
per  cent  of  the  fires  were  due  to  candles  and  seven  per  cent  due  to 
gas.  In  this  present  day  and  age,  fires  from  the  use  of  candles  used 
as  regular  lights  are  not  common.  The  use  of  candles  to  explore 
dark  places,  gas  leaks,  and  in  the  Christmas  decorations,  however, 
are  only  too  common  and  offer  a  constant  source  of  trouble.  Work- 
men frequently  use  candles  and  go  away   leaving  them  burning. 


40 


LECTURES  ON  FIRE  INSURANCE 


Hazards  are  those  usual  to  use  of  open  flame,  which  may  come  in 
contact  with  inflammable  material  or  ignite  volatile  or  explosive 
vapors.  Occasionally  a  church  is  burned  by  the  use  of  altar  candles 
and  fires  ensue  by  their  use  in  connection  with  certain  religious  rites 
and  ceremonies.  Millions  of  candles  are  used  for  this  purpose,  and 
it  has  been  stated  that  the  manufacture  and  consumption  of  this 
time-honored  commodity  are  increasing  at  the  rate  of  about  10  per 
cent  per  year,  and  amounted  in  value  to  over  six  million  dollars 
last  year. 

Advocate  the  use  of  electric  hand  torches,  which  are  highly 
satisfactory  for  momentary  lights,  and  discourage  use  of  candles. 
Where  candles  must  be  vised,  precaution  should  be  taken  to  prevent 
upsetting  by  locating  in  permanently  fixed  holders,  free  from  pos- 
sible contact  with  light  inflammable  material. 

Torches.  Open  torches,  burning  kerosene  or  other  inflammable  liquids, 

are  sometimes  used  by  mechanics  and  millwrights  in  making  repairs 
around  the  dark  places  to  be  found  in  a  factory,  such  as  shaft  holes, 
engine  pits,  etc.  As  a  general  rule,  these  torches  should  be  pro- 
hibited. Constant  care  must  be  taken  where  used  to  keep  the  open 
flame  from  coming  in  contact  with  inflammable  material. 

Gas.  The  first  authentic  record  of  an  inflammable  gas  from   coal, 

w'hich  is  usually  spoken  of  as  illuminating  gas,  retort  gas,  or  city 
gas,  dates  from  1739.  In  1792  William  Murdoch,  whom  Mr. 
Carnegie  placed  in  his  recent  Hall  of  Fame,  conceived  the  idea  of 
applying  this  gas  to  economical  purposes,  and  in  1798  he  fitted  up 
the  engine  works  of  Messrs.  Boulton  and  Watts,  in  Birmingham, 
with  the  appliances  for  illumination.  In  1807  gas  lights  first 
appeared  in  the  streets  of  London,  and  the  first  company  was 
formed  in  1810.  City  gas,  as  we  know  it  to-day,  is  somewhat  dif- 
ferent than  the  gas  which  results  from  tlie  ordinary  destructive 
distillation  of  coal,  for  water  is  introduced  into  the  process  and 
passed  through  the  hot  bed  of  coal,  the  water  being  broken  up  into 
its  constituent  gases,  which  enter  into  the  general  composition. 
Naphtha  is  also  used,  but  the  methods  of  manufacture  need  not  con- 
cern us.  Water  gas  has  less  smell  than  straight  coal  gas.  Conse- 
(juently  a  leak  is  less  easily  discovered  and  serious  explosions  have 
occurred  due  to  this  fact.  Average  city  gas  is  much  lighter  than 
air.  Coal  gas  has  an  explosi\  e  range  from  eight  (8)  to  twenty-three 
(^8)  parts  of  gas  with  air,  and  water  gas  a  range  of  from  nine  (9) 

Methods  of      to  fifty-five  (o;")). 

Use.  Used   in   open   ilame  jets,  either  fixed  or  swinging  brackets ; 


COMMON   nRE  HAZARDS  41 


mantle  lamps,  either  permanent  fixtures  or  portable  table  lamps :  or 
gas  arc  lamps.  Lighted  by  matches  or  electric  attachments.  Gas 
supplied  from  street  mains  through  private  connections,  with  or 
without  outside  shut-off  gates.  Registering  meters  in  connection 
frequently  located  in  basements. 

The  chief  hazard  of  gas  lighting  comes  either  from  the  gas  jets  Gas  Lighting 
themselves  or  the  use  of  matches.  The  latter  feature  has  been  Hazards, 
reduced  by  the  use  of  electric  igniters.  Jets  moved  in  contact  with 
inflammable  material  or  curtains,  etc.,  blown  across  the  open  jets. 
Located  too  near  ceilings.  Lava  tips  blown  out  of  the  gas  burner. 
Leaky  pipes  and  fixtures.  Flexible  rubber  tubing  is  dangerous. 
In  gas  arc  lamps,  glowing  particles  of  the  mantles  are  apt  to  fall 
through  the  bottom,  and  occasionally  gas  arcs  burn  in  two  and  allow 
the  lower  part  of  lamp  to  fall  on  inflammable  material,  or  the  feed 
pipe  has  burned  off.  Prevalent  use  of  matches.  Rubbish  and 
inflammable  material  piled  around  or  in  close  proximity  to  gas 
meters.  Soldered  joints  easily  melted  by  small  fire  and  gas  ignited. 
Lack  of  outside  shut-off  gates  on  mains  a  serious  hazard. 

Stationary  gas  jets  preferred.  Movable  jets  should  ha\e  suit-  Protection  of 
able  stops  provided.  vSuitable  wire  guards  should  be  attached  Hazards, 
around  jet  in  either  case.  Jets  should  in  no  case  be  less  than  eight- 
een inches  below  ceilings  or  under  other  inflammable  material,  and 
if  less  than  thirty-six  inches,  they  should  be  provided  with  a  heat 
deflector  suspended  at  least  four  inches  below  the  ceiling  or  material 
exposed.  Discourage  or  prohibit  use  of  lava  tips.  Piping  and  fix- 
tures to  be  installed  by  reputable  experts.  Flexible  or  rubber  tub- 
ing to  be  discouraged.  Where  flexible  connections  are  necessarv, 
place  the  valve  where  the  tube  joins  the  gas  pipe — not  at  the  burner. 
Arrange  shields  under  gas  arcs.  Gas  meters  should  be  in  a  safe 
part  of  the  building,  where  least  liable  to  accident  and  where  they 
may  have  free  ventilation  to  air.  Inflammable  material  should  not 
be  stored  in  close  proximity  to  meters.  Arrange  guards,  if  need 
be,  to  keep  storage  away.  Require  outside  shut-off  gates  in  all 
private  connections. 

Lamps  were  used  in  the  early  ages  in  Egypt,  Greece  and  Rome.  Kerosene 
Lamps  with  horn  sides  are  said  to  have  been  invented  by  Alfred  Oil. 
the  Great,  who  died  in  901.  London  streets  were  lighted  with  oil 
lamps  in  1781.  A  Frenchman  invented  a  lamp  which  would 
neither  smoke  nor  smell  in  1784.  Aliout  180o,  Carcel  invented  a 
lamp  founded  on  the  principle  of  Argand.  However,  lamps  such 
as  we  know  them  now  were  developed  since  the  practical  introduc- 


42  LECTURES  ON  HRE  INSURANCE 


tion  of  petroleum   and  kerosene.     The   real   dcNelopment   of    this 
industry   dates   from   the   discovery   of  a   productive  oil  well   near 
Titusville,  Pennsylvania,  in  1859,  by  Mr.  Drake. 
Kerosene  Very  few  manufacturing  properties  are  to-day  lighted  by  kero- 

Oil.  sene  oil  lights,  but  a  vast  number  of  dwelling  and  mercantile  prop- 

erties are  illuminated  by  this  means.  Kerosene  oil  lighting  is 
considered  more  hazardous  than  gas  or  electricity  and  is  not 
approved  (except  approved  watchman's  lantern)  in  buildings  of 
standard  mill  construction.  Hazards  mostly  of  care  and  use. 
There  is  but  little  danger  of  the  modern  kerosene  lamp  exploding 
if  it  is  cleanly  kept.  The  little  flat  tube  alongside  the  wick-tube  is 
an  open  passage  for  the  constant  escape  of  vapors  from  the  oil, 
which,  if  confined,  would  cause  trouble.  This  \apor  is  consumed 
in  the  flame  of  the  lamp  without  noise  or  danger.  It  is  when  this 
tube  and  the  wick-tube  become  dirty  or  choked  with  soot  or  wick- 
carbon  that  the  danger  of  explosion  is  present.  Cleanliness  is  the 
first  law  of  safetv  in  illumination  by  coal  oil.  Dirty  metal  retains 
the  heat  to  a  far  greater  degree  than  a  nicely  polished  lamp.  This 
causes  the  vapor  to  rise  from  the  oil,  and  an  explosion  is  likely  to 
occur.  By  all  means  the  burner  should  be  kept  clean,  and  also 
the  wicks. 

Only  metal  lamps  should  be  used,  and  the  central  draft  type  is 
not  approved.  Where  lamps  are  to  be  permanently  located,  such 
as  in  factories,  stores,  etc.,  they  should  be  supported  by  suitable 
metal  hangers  and  proper  heat  guards,  provided  to  protect  the 
hanger  and  the  material  o\erhead.  The  lamps  should  be  taken  to 
some  suitable  place  outside  of  the  main  premises  for  filling  and  the 
supply  of  kerosene  kept  at  that  point.  Lamps  should  always  be 
filled  in  daytime  and  never  when  lighted.  Paper  and  cloth  shades 
should  never  be  used  on  lamps.  Only  high  test  oil  should  be  used, 
hat  this  is  well  governed  by  law  and  inspection  in  most  states. 

Note  :  The  specifications  of  the  United  States  Army,  defining 
kerosene,  require  a  flashing  point  between  135°  and  150°  Fahren- 
heit, and  a  hydrometer  test  of  forty-eight  degrees  Baume  { specific 
gravity  0.7865), 

It  is  probably  too  much  to  expect  of  the  maker  of  cheap  lamps 
that  he  help  reduce  the  fire  w'aste  of  the  country  by  eciuipping  all 
his  burners  with  extinguishing  attachments.  People  will  continue 
to  "blow  them  out"  and  hence  occasionally  "blow  them  up" — 
and  themseKes  with  them — by  forcing  the  flame  down  into  the 
lamp  bowl  when  it  contains  just  the  right  mixture  for  an  explosion  ; 


COMMON  FIRE  HAZARDS  43 


but  the  startling  statistics  of  the  preventable  loss  of  life  and  property 
by  tire  yearly  in  the  United  States  may  lead  even  such  careless  per- 
sons to  new  considerations  of  responsibility. 

The  first  othcial  tabulation  of  the  causes  of  tires,  which  was  Lanterns, 
undertaken  by  the  Factory  Mutuals,  was  an  investigation  of  the 
fires  caused  by  lanterns,  and  the  fact  was  disclosed  that  there  was  a 
large  number  of  fires  with  heavy  losses  attributed  to  broken  lanterns. 
This  led  to  an  exan.ination  of  all  lanterns  in  mill  use,  and  it  was 
found  that  all  the  lanterns  were  badly  made,  liable  to  melt  at  the 
joints,  and  insufficiently  guarded,  and  the  safety  lantern  was  speedily 
developed. 

Lanterns  should  be  strongly  constructed  of  metal,  with  proper 
guards  to  protect  the  chimney.  A  common  fault  is  the  removable 
bottom  for  filling,  which  may  get  loose  and  drop  out.  Numerous 
so-called  safety  lanterns  are  on  the  market,  some  of  which  have 
given  good  service,  especially  for  watchman's  use.  Numerous  fires 
have  been  caused  by  broken  or  defective  lanterns  and  the  hazard 
deserves  greater  attention  than  it  ordinarily  receives.  Only  approved 
lanterns  should  be  allowed. 

These  systems  used  to   supply  kerosene  vapor  lamps,  stoves.  Kerosene  Oil 
blow-torches  and  furnaces  with  oil  under  considerable  pressure  are   Pressure 
regarded  from  an  insurance  viewpoint  as  much  more  hazardous  than  Systems, 
ordinary  kerosene  lamps  or  stoves.      Where  used,  the  rules  and  re- 
quirements which  have  been  prescribed  should  be  rigidly  observed 
and  only  approved  devices  allowed. 

The  following  are  the  most  important  features  governing  the 
installation  of  this  class  of  de\  ice.  Supply  tanks  should  be  located 
outside  of  building.  Special  permission  should  be  given  for  any  in- 
side installation.  Lamps  should  be  carefully  located,  free  from 
combustible  material,  and  not  used  in  the  ^  icinity  of  inflammable 
dust  or  gases.  They  should  be  located  so  that  the  burners  will  be 
thirty  inches  or  more  from  the  ceiling,  and  be  provided  with  metal 
heat  deflectors.  Careful  rules  are  prescribed  for  the  nature  of  dis- 
tributing tubes  and  methods  of  installation. 

To  be  installed  in  strict  conformity  to  the  requirements  of  the  Electricity. 
National  Electrical  Code,  vvhich  is  today  almost  universally  used 
and  followed  in  all  parts  of  the  country.  Modern  electrical  equip- 
ments, when  first  installed,  are  generally  free  from  any  serious 
fire  hazard.  The  chief  difticulty  comes  in  changes  to  the  equip- 
ment and  abuse  of  the  system  after  it  has  been  installed.  Temporary 
wiring,  fuses  replaced  by  wire,  promiscuous   use  of   flexible  cord, 


44 


LECTURES  ON  FIRE  INSURANCE 


abrasions  or  wearing  of  insulation  througli  carelessness,  poor 
connections  or  lack  of  fuses  where  new  wiring  has  been  installed, 
are  some  of  the  common  causes  of  trouble.  Old  systems  should 
be  inspected  by  experts  and  improved  where  necessary.  Many 
electrical  fires  occur  from  lamps.  Arc  lights  not  properly  con- 
structed may  allow  molten  metal  or  hot  glass  or  carbon  to  drop  on 
combustible  material.  Incandescent  lamps  may  cause  fire  when 
closely  confined  with  combustible  material. 


Hazards  of  !•   ^o  not  use  flexible  cord   except   for  pendants,    wiring    of 

Incandescent    fixtures  and  portable  lamps  or  motors.     Xeyer  use  cord  for  lamps 
Lamps.  in  show  windows  or  as  a  support  for  clusters. 

2.  Flexible  cord  should  not  be  hung  on  nails,  gas,  water  or 
steam  pipes,  as  insulations  are  liable  to  become  worn  and  short 
circuits  result ;  also  a\"oid  tying  knots  in  them. 

3.  All  wiring  in  show  windows  for  decoration  effects  should 
be  attended  to  by  a  competent  electrician,  and  lamps  should  be  on 
fixtures  only,  away  from  inflammable  material.  Lamp  sockets 
should  neyer  be  surrounded  with  decorations,  as  they  frequently 
become  hot  owing  to  bad  contact  in  the  socket  or  a  short  circuit. 

4.  Incandescent  lamps  giye  out  a  dangerous  degree  of  heat, 
particularly  as  they  get  old,  and  in  all  cases  where  there  is  a 
possibility  of  their  coming  in  contact  with  merchandise  they  should 
be  protected  with  wire  cages  to  prevent  their  being  placed  on  open 
stock,  paper  boxes,  etc.,  which  are  often  found  in  a  scorched 
condition  from  this  cause. 

Acetylene.  ^-  Ne\  er  use  paper  shades  or  ornament   pendants   with   tissue 

paper,  which  may  take  fire  either  from  a  hot  socket    or    a    short 
circuit  and  fall,  while  burning,  on  inflammable  material. 

By  heating  a  mixture  of  coke  powder  and  limestone  in  an 
electric  furnace  at  a  high  temperature,  calcium  carbide  is  formed. 
When  treated  with  water  this  is  decomposed,  with  formation  of 
acetylene  gas.  Calcium  carbide  was  first  prepared  on  a  commer- 
cial scale  in  1892.  Acetylene  gas,  as  such,  was  known  and  pre- 
pared in  another  manner  in  18:36.  Calcium  carbide  is  in  itself 
non-explosive  and  non-inflammable,  but  owing  to  its  peculiar 
properties  when  brought  into  contact  with  water  or  dampness,  it 
is    a   somewhat    hazardous    material,   and    rules    have   been    made 


COMMON  nRE    HAZARDS  45 


o-overning    its    handling   and    storage,    which    should    be    strictly 
observed. 

When  water  and  calcium  carbide  are  brought  together,  sixty- 
four  parts  of  calcium  carbide  and  thirty-six  parts  of  water 
mutually  decompose,  evolving  twenty-six  parts  of  acetylene  and 
seventy-four  parts  of  sludge,  or  slaked  lime.  A  pound  of  com- 
mercial acetylene  yields  about  five  cubic  feet  of  gas.  As  consid- 
erable heat  is  generated  in  this  reaction,  it  is  highly  desirable  to 
have  the  water  greatly  in  excess  of  the  theoretical  quantity  needed, 
as  acetylene  tends  to  change  under  heat  and  polymerize  into  other 
undesirable  compounds;  the  ease  of  removing  sludge  is  also 
enhanced.  Acetylene  has  a  characteristic  odor  of  garlic  and 
burns  with  a  fine  white  flame.  It  is  highly  explosive  when  mixed 
with  the  right  proportion  of  air.  Scientific  investigators  have 
found  the  explosion  to  be  most  violent  in  a  mixture  of  about  nine 
parts  of  air  and  one  part  of  gas,  with  an  explosive  range  from 
three  per  cent  to  eighty-two  per  cent  of  acetylene  in  mixture  with 
air.  Experiments  conducted  under  normal  and  practical  condi- 
tions of  use  showed  the  range  to  be  from  three  per  cent  to  about 
thirty-three  per  cent,  the  most  violent  mixture  consisting  of 
twelve  parts  of  air  and  one  of  gas.  The  maximum  amount  of 
gas  which  will  form  an  explosive  mixture  is  of  little  importance, 
and  the  total  explosive  range  is  apt  to  be  misleading  in  consider- 
ing any  gas.  Acetylene  gas  is  lighter  than  air,  its  specific 
gravity  being  0.898.  Owing  to  the  pungent  odor  of  acetylene, 
it  can  very  readily  be  detected  before  there  is  a  sufficient  amount 
in  a  room  to  form  an  explosive  mixture,  and  physical  discomfort 
will  be  experienced  both  before  an  explosive  mixture  or  a  poison- 
ous mixture  has  been  reached.  In  this  respect,  it  is  much 
superior  to  city  gas. 

Calcium    carbide,    in    quantities    not  to    exceed   six   hundred  Rules  for  the 
pounds,  may  be  stored,  when  contained    in  approved  metal   pack-   Storage  of 
ages   not    to   exceed    one    hundred    pounds    each,    inside    insured   Calcium 
property,  provided    that   the  place  of  storage   be  dry,  waterproof 
and   well    ventilated,  and    also  provided   that    all   but   one   of   the 
packages  in  any  one  building  shall    be  sealed   and   the  seals  shall 
not  be  broken  so  long  as   there  is  carbide  in  excess  of   one  pound 
in    any    other    unsealed    packages    in   the   building.      Conditions 
governing  storage   of   greater   quantities,  specific   details  of   con- 
tainer,   etc.,    are   given    in   the   Rules  and    Requirements    on   this 
subject. 


46 


LECTURES  ON  FIRE    INSURANCE 


Acetylene  Acetylene  apparatus   is   now   almost   universally  made  under 

Apparatus.  ^1-,^  strict  surveillance  of  the  Laboratories,  and  only  approved 
machines  should  ever  be  permitted  for  use,  if  not  in  violation  of 
any  state  law  or  local  ordinance,  and  if  the  company  insuring- 
the  property  consents  to  the  same  in  writing  on  its  policy. 
Where  used,  care  should  be  taken  to  see  that  these  machines  are 
installed  throughout  in  accordance  with  the  Rules  and  Require- 
ments. Acetylene  gas  machines,  especially  in  closely  built  up 
districts,  should  preferably  be  installed  outside  of  buildings  in 
properly  constructed  generator  houses.  It  might  be  added  that 
the  experience  of  underwriters  throughout  the  United  States  with 
modern  and  permitted  acetylene  installations  has  been  at  least  as 
favorable  as  that  with  the  form  of  illuminant  which  they  have 
replaced.  The  only  territory  not  now  allowing  installations 
within  the  building  is  New  England  and  the  southeastern  states. 
Acetylene  The   function   of   an   acetylene    generator  is  a  comparatively 

Generators,  simple  one.  It  provides  for  the  bringing  together  of  the  water 
and  the  carbide,  washing  and  filtering  the  gas,  storing  it  to  a  cer- 
tain extent,  and  delivering  it  under  a  small  pressure  to  the  service 
pipe  for  distribution.  Acetylene  generators  are  divided  into  two 
general  classes,  automatic  and  non-automatic.  In  the  automatic 
machine  the  gas  is  generated  as  it  is  used,  the  quantity  generated 
being  automatically  governed  by  the  rate  of  consumption.  In 
the  non-automatic  machine  a  definite  quantity  of  gas  is  generated 
at  a  fixed  rate  and  stored.  The  former  type  is  used  for  all  small 
installations  such  as  house  lighting  plants.  The  latter  type  is 
used  for  large  plants,  such  as  village  lighting  systems.  In  this 
discussion  we  are  interested  chiefly  in  the  automatic  generator  as 
a  private  lighting  plant  for  the  country  home. 

The  most  important  feature  to  be  considered  in  the  design  of 
an  acetylene  generator  is  that  of  cool  generation.  When  the  car- 
bide and  water  unite  to  form  gas,  violent  chemical  action  occurs 
with  the  liberation  of  large  quantities  of  heat.  If  this  heat  be 
localized,  dangerous  temperature  rise  is  liable  to  occur.  The 
carbide  in  such  a  type  of  generator  would  not  give  its  full  quota 
of  gas  and  the  burners  would  soon  clog  up,  due  to  its  impure 
quality.  When  water  is  fed  into  the  carbide  it  is  evident  that 
there  will  be  more  or  less  localization  of  heat,  with  consequent 
heat  generation.  Hence  the  most  rational  method  would  be  to 
feed  carbide  in  small,  well  regulated  quantities  into  a  large  body 
of  water,  where   the   heat  would   be  quickly  transferred   and   dis- 


COMMON  FIRE  HAZARDS  47 


sipated.  The  water  to  carbide  feed  type  of  generator,  designated 
as  the  "water  feed"  generator,  is  rapidly  disappearing  from  the 
market,  and  the  carbide  to  water  or  "carbide  feed"  generator  is 
now  almost  universally  used. 

The  carbide  feed  generators  are  divided  into  the  following  Classes  of 
classes.  The  "direct  feed":  Feeding  the  carbide  by  gravity  into  Generators, 
the  water  by  opening  the  feed  valve  which  is  operated  directly  by 
the  gas  holder  bell.  The  "indirect  feed":  The  gas  holder  bell 
operates  a  feeding  mechanism  which  carries  the  carbide  forward 
to  the  feed  point  where  it  falls  into  the  water.  The  "inde- 
pendent feed":  The  feed  valve  is  operated  by  a  clockwork  or 
motor  mechanism  controlled  by  gas  holder  bell.  The  "indirect 
independent  feed":  A  motor  or  clockwork  controlled  by  gas 
holder  bell  operating  a  feed  mechanism  which  carried  the  carbide 
forward  to  the  feed  point. 

The  acetylene  gas  machine  consists  of  two  essential  parts. 
The  generator  proper  and  the  gas  holder,  or  gasometer  as  it  is 
often  called.  The  gasometer  by  the  rise  and  fall  of  its  gas  bell 
regulates  the  quantity  of  gas  generated  and  also  serves  as  a  pres- 
sure equalizer,  supplying  the  gas  to  the  mains  at  a  constant 
uniform  pressure. 

A  typical  carbide  feed  machine  is  shown  in  Figure  1.  The  Typical 
carbide  is  fed  from  hopper  Q  into  the  body  of  water  G.  Gas  is  Carbide  Feed 
generated  and  passes  out  into  the  water  seal  E.  This  chamber  is  Machine. 
partially  filled  with  water.  From  E  the  gas  passes  through  the 
pipe  Pi,  into  the  gasometer.  The  gasometer  bell  is  closed  at  the 
top  and  open  at  the  bottom.  It  rests  in  the  body  of  water  whose 
surface  is  at  W.  As  gas  enters  the  bell  rises,  thus  acting  as  a 
storage  tank  for  the  gas.  The  telescopic  action  of  the  bell  is 
guided  by  the  rods  H.  The  gas  bell  supplies  gas  at  a  virtually 
constant  pressure  through  pipe  F-2  and  filter  F  to  service  main  at 
M.  When  the  bell  rises  to  a  certain  height  it  stops  the  weight 
motor  and  hence  carbide  feed.  When  the  bell  drops  below  this 
point,  carbide  is  again  fed  into  the  water  until  the  bell  rises  above 
this  point.  The  chamber  C  is  of  course  filled  with  water  to  the 
same  height  as  the  water  in  E.  Hence  any  undue  pressure  in 
gas  bell  will  cause  gas  to  bubble  through  open  connection  at  Li 
into  chamber  C.  If  the  gas  bell  should  accidentally  rise  too  high, 
due  to  a  fault  in  the  mechanism  or  undue  after  generation,  the 
gas  will  enter  telescopic  tube  at  R  and  escape  through  L-j  into  C. 
The    chamber   C    is   connected   with    the  open  air   by    the  escape 


48 


LECTURES  ON  FIRE    INSURANCE 


Portable 
Tabic 
Lamps — 
Class  D. 


Dissolved 
Acetylene. 


pipe  S.  The  by-pass  valve  I  is  used  should  it  become  necessary 
to  empty  gas  bell  for  cleaning  or  repairs.  The  generator  is 
cleaned  by  agitating  the  contents  of  G  with  the  mixer  A.  The 
mixture  of  slaked  lime  and  water  is  then  drawn  off  from  the 
sludge-cock  K.  The  handle  A  is  water  sealed,  as  shown,  to 
prevent  the  escape  of  gas  around  same. 

Only  approved  lamps  should  be  allowed.  This  form  of 
lighting  has  not  been  exploited  to  any  extent. 

Every  owner  of  an  acetylene  generator  system  should  be 
presented  with  the  printed  "Cautions"  given  in  the  "List  of 
Appliances"  at  the  end  of  the'section  on  "Acetylene  Generators." 

When  acetylene  is  compressed  and  forced  into  a  tank  filled 
with  some  porous  material  saturated  with  some  liquid  such  as 
"acetone,"  it  seems  to  lose  the  explosive  properties  that  it 
ordinarily  possesses  when  under  pressure.  Acetone  dissolves 
twenty-four  times  its  own  bulk  of  the  gas  at  ordinary  temperature 
and  pressure  and   the  quantity    dissolved    increases    directly   with 


COMMON  RRE  HAZARDS  49 


the  pressure  applied.  As  the  pressure  is  released,  the  gas 
escapes  and  is  delivered  cool  and  dry  to  the  burners.  Dissolved 
acetylene  finds  its  application  with  yachts,  motor  cars,  railway 
headlights  and  railway  car  lighting.  For  ordinary  house  light- 
ing, it  is  entirely  out  of  the  question;  acetylene  can  be  provided 
for  stationary  purposes  by  generators  so  much  more  economically 
that  dissolved  acetylene  finds  no  application  here. 

Under  compression  acetylene  becomes  most  hazardous,  in-  Liquid 
creasing  with  the  pressure  to  the  point  of  liquefaction.  At  a  Acetylene, 
temperature  of  68°  Fahrenheit  and  about  597  pounds  per  square 
inch  pressure,  acetylene  may  be  liquefied.  This  liquid  is  of  a 
violent  explosive  nature,  and  does  away  with  all  thought  of  storing 
the  gas  by  this  means.  No  one  has  ever  succeeded  in  getting  an 
explosion  from  pure  acetylene  gas  at  a  pressure  under  one 
atmosphere.  Since  the  ordinary  pressure  of  the  gas  under  service 
is  but  a  few  ounces  at  most,  it  is  evident  that  there  is  absolutely 
no  danger  to  be  apprehended  from  this  source,  unless  mixed  with 
the  necessary  amount  of  air. 

The  use  of  liquid  acetylene  is  not  permitted  under  any  con- 
ditions granted  by  underwriters,  and  is  prohibited  by  law  in 
many  places. 

These  devices  have  been   divided    into  the  following  classifi-   Gasolene 
cations,    and    only   approved   machines  should    be   permitted    and   Lighting 
installed  according  to  the  Rules  and  Requirements.      The  greatest  "^ys'^nis. 
danger   from   these  systems   is   the  storage  and   handling  of  gaso- 
lene,   which    vaporizes    at   ordinary   temperatures.      Vapor   from 
one  pint  of  gasolene  will  make  l200  cubic  feet  of  air  explosive. 

Class  A.  Type  of  machine  employs  an  outside  underground 
storage  tank  and  carburetter.  Most  carburetters  are  of  the  one 
cell  type,  but  machines  are  made  with  as  many  as  four  of  these 
sections,  which  are  usually  metal  or  wooden  frames  supporting 
canton  flannel,  canvas,  burlap,  or  similar  material,  onto  which 
gasolene  is  drawn  by  capillary  action  from  the  supply  which  lies 
upon  the  bottom  of  each  section  or  layer.  Air  is  passed  through 
the  carburetter,  supplied  by  a  blower  operated  by  weight  or  water 
wheel,      A   mixer  automatically  proportions   the  amount   of  rich 

*  Note. — For  comprehensive  descriptive  and  illustrated  article  on 
this  subject  read  article  by  H.  W.  Forster,  entitled,  "Gasolene  Lighting," 
in  Quarterly  of  National  Fire  Protection  Association,  January,  1910,- \'ol. 
3,  No.  3,  page  253;  also  issued  in  pamphlet  form  by  the  lndepen^ejic,e, 
Inspection  Bureau,  Philadelphia,  Pa. 


50  LECTURES  ON  FIRE  INSURANCE 


vapor  and  air  to  make  the  proper  gas.  These  machines  which 
do  not  introduce  liquid  gasolene  into  the  building,  are  regarded 
from  an  insurance  viewpoint  as  constituting  the  least  dangerous 
type  of  gasolene  gas  machine. 

Class  B.  This  system  has  a  small  inside  carburetter,  con- 
sisting usually  of  steam  coils  onto  which  gasolene  is  sprayed,  but 
an  outside  underground  storage  tank.  These  machines  are 
regarded  from  an  insurance  viewpoint  as  more  dangerous  than 
those  having  outside  carburetters,  owing  to  the  fact  that  they 
introduce  gasolene  in  liquid  form  and  manufacture  gas  inside  the 
building. 

Class  C.  Systems  having  outside  tanks  and  inside  flame- 
heated  generators.  This  may  be  the  individual  t3'pe  where  each 
lamp  possesses  a  generator  or  the  common  generator  type,  in 
which  gas  from  the  common  generator  is  distributed  to  all  the 
lights.  These  systems  are  regarded  from  an  insurance  viewpoint 
as  more  dangerous  than  the  systems  in  Class  A  or  Class  B,  owing 
to  the  fact  that  they  introduce  gasolene  in  liquid  form  into  the 
building  and  are  provided  with  flame-heated  generators.  Par- 
ticular attention  is  called  to  the  rule  requiring  all  tanks  used  in 
connection  with  these  systems  to  be  installed  outside  of  the 
building. 

Class  D.  Gasolene  vapor  lamps  of  both  pressure  and  grav- 
ity type.  These  lamps  are  no  longer  used  in  large  quantities. 
They  are  regarded  from  an  insurance  viewpoint  as  even  more 
dangerous  than  the  preceding  classes,  owing  to  the  fact  that  their 
gasolene  supply  is  in  close  proximity  to  the  flame  and  that  they 
may  frequently  be  refilled  inside  of  the  building.  Note  par- 
ticularly that  gasolene  lamps  should  be  hung  at  a  safe  distance 
from  ignitible  material,  woodwork,  etc. 

Class  E.      Especially    hazardous    systems    which    introduce 
especially  dangerous  features  and   have  tanks  inside  of  buildings. 
This  class  is  of  practically  no  commercial  importance. 
^  .  .  Any    private    gas-making   plant    requires    maintenance,    and 

because  of  this  fact  its  ability  to  compete  with  gas  or  electricity, 
where  reasonable  rates  are  charged  for  these  illuminants,  is 
limited.  Class  "A"  machines  need  little  attention;  putting  a 
barrel  or  two  of  gasolene  into  the  carburetter  occasionally,  and 
winding  up  the  blower  weight  at  regular  intervals,  is  practically 
all  that  needs  to  be  done,  and  wherever  the  water  wheel  driven 
blower   is  used,  the  latter  and  more  laborious  part  of  the  main- 


COMMON  FIRE  HAZARDS  5t 


tenance  falls  away.  Class  "C"  system  tanks  require  frequent 
filling  and  pumping  up,  and  the  lamps  must  be  generated  each 
time  they  are  lighted.  With  a  common  generator  system  it  is 
only  necessary  to  heat  this  one  device,  but  adjustment  has  to  be 
made  as  more  lamps  are  added  or  as  the  number  is  reduced. 

Any  private  lighting  plant  requires  care,  and  is  subject  to 
depreciation.  With  gas  or  electricity,  purchased  from  outside 
sources^  care  is  reduced  to  a  minimum,  and  repairs  or  replace- 
ment of  apparatus  is  practically  nil.  For  this  reason  gasolene 
devices  have  taken  little  foothold  in  the  cities.  After  installing 
such  apparatus,  many  owners  have  turned  back  to  the  convenient 
gas  cock  and  snap  switch.  For  years  these  appliances  have  gone 
into  the  rural  districts  where  central  station  lighting  is  not  avail- 
able, and  that  is  the  field  in  which  they  will  probably  continue  to 
be  installed. 

Blaugas  is  made  from  the  destructive  distillation  of  oil  at  a  Blaugas. 
somewhat  lower  temperature  than  is  used  where  gas  is  distilled 
from  coal.  By  a  three  stage  compressor  it  is  compressed  from 
60  to  100  atmospheres  (900  to  1,500  pounds)  and  then  placed  in 
cylinders  or  bottles.  The  gas  is  in  the  liquid  form,  the  liquid 
consisting  of  gases  which  liquefy  and  also  certain  gases  which  are 
held  in  the  solution.  The  gas  is  stable  in  that  it  will  not  disasso- 
ciate with  shock,  in  this  respect  being  entirely  different  from 
liquid  acetylene.  The  cylinders  or  bottles  have  been  accepted  by 
the  Bureau  for  the  Safe  Transportation  of  Explosives  and  Other 
Dangerous  Articles,  severe  tests  being  made  by  this  Bureau  by 
exploding  dynamite  cartridges  at  the  side  of  the  cylinders  and  by 
placing  the  cylinders  on  fire  and  allowing  them  to  heat  up  until 
the  safety  valve,  with  which  each  bottle  is  equipped,  opened. 
The  cylinders  are  made  in  Germany,  are  tested  to  1^-"J0  atmospheres 
(3,7o0  pounds)  and  are  further  tested  to  3,200  pounds  in  this 
country.  Tests  show  that  the  cylinders  will  not  burst  until  pres- 
sure reaches  over  6,000  pounds.  At  the  subscriber's  or  con- 
sumer's premises,  two  of  these  bottles  are  placed  in  a  metal  cabinet 
on  the  outside  of  the  building  to  be  lighted,  and  is  expanded  into 
the  building  through  suitable  reducing  and  regulating  valves. 
The  high  pressure  cylinders,  together  with  reducing  and  regulating 
valves,  are  contained  in  a  locked  and  ventilated  metal  box. 

This  system  is  arranged  to  run  automatically  with  small 
expansion  tanks  in  this  box,  or  non-automatically  with  larger  expan- 
sion tanks,  which  are  buried  or  installed  in  well  ventilated  brick 


52  LECTURES  ON  FIRE  INSURANCE 


or  concrete  houses  when  near  buildings.  The  gas  itself,  after 
introduction  into  the  house  piping,  embodies  about  the  same 
hazards  as  ordinary  city  gas,  but  is  under  somewhat  higher  pres- 
sure on  the  house  side  (being  about  twelve  inches  of  water 
column  or  one-half  pound). 

The  safeguards  on  the  apparatus  are  as  follows: — 
Safeguards.  To  guard   against   failure   of  high   pressure  reducing  valve. 

Should  pressure  on  expansion  tank  exceed  120  pounds  (tank  is 
tested  to  :]00)  a  safety  valve  operates  and  allows  gas  to  escape  to 
outside  air. 

To  guard  against  failure  of  low  pressure  reducing  valve. 
Should  pressure  on  house  side  reach  or  exceed  forty  inches  of 
water  (less  than  two  pounds)  a  mercury  seal  is  broken  and  gas 
blows  to  outside  air. 

All  parts  which  are  subjected  to  high  pressure  are  placed 
outside  buildings. 

Cylinders  and  tanks  have  a  reasonable  margin  of  safety. 

In  case  of  fire  the  safety  valve  on  the  cylinders  would  let  go 
and  the  gas  would  burn.  There  would  not  be  an  explosion 
under  these  conditions. 

It  is  reasonable  to  suppose  that  the  gas  will  replace  other 
methods  of  lighting  which  are  at  least  as  hazardous,  probably 
more  so.  Cylinder  contains  about  twenty-two  pounds  of  gas. 
Cylinder  contains  equivalent  of  oOO  cubic  feet  of  gas.  Burning 
of  one  foot  of  gas  equivalent  to  120  c.  p.  The  New  England 
Insurance  Exchange  allow  the  installation  of  this  apparatus  with- 
out any  extra  change,  if  it  is  installed  in  accordance  with  the  pre- 
scribed methods,  that  is,  with  the  apparatus  entirely  out  of  the 
building. 

There  are  other  liquid  gas  systems,  but  they  have  not  attained 
great  commercial  importance,  except  the  well  known  Pintsch  gas, 
so  much  used  by  railroads.  The  hazards  are  not  essentially 
different  from  those  of  Blaueas. 

2.  HEATING  AND  VENTILATION 

(Including  Chimney  Construction) 

ll^^^  One  of  the  earliest   forms  of  heating  of  which   we   have  any 

knowledge  is  that  of  the  charcoal   brazier,  which    in   the   days  of 

the    Grecian    and    Roman   civilizations  was  a    favorite  means   of 

warming   rooms,  while   the    Romans    had    a    somewhat   primitive 


COMMON  FIRJ:  hazards  53 


way  of  heating  known  as  the  "Hypocaust."  The  apparatus  con- 
sisted of  a  firephice  built  outside  of  the  room,  the  air  and  smoke 
being  conveyed  though  the  building  by  means  of  flues  perforated 
at  intervals.  In  the  days  of  our  aborigines  fires  vs-ere  built  upon 
the  floors  and  the  smoke  was  allowed  to  make  its  escape  through 
a  hole  in  the  roof,  or  as  best  it  could,  and  the  chimney  was  a 
slow  evolutionary  process. 

Fireplaces  should  be  carefully  planned  and  constructed  in  Fireplaces, 
connection  with  the  building  of  chimneys.  (See  under  Chimneys 
for  specific  details.)  Much  care  should  be  given  to  the  design  of 
fireplace  flues.  Hearths  should  be  of  ample  thickness  and  area, 
and  no  wood  used  to  support  them.  Mantles  should  not  be  located 
so  that  there  will  be  any  danger  of  ignition.  Wire  guards  should 
be  provided  and  required  in  front  of  fireplaces  to  previ  nt  sparks 
from  flying  out,  or  babies  and  animals  crawling  too  near. 
Examine  carefully  any  proposed  plans  for  addition  of  fireplaces 
in  chimneys  already  built  and  not  so  designed.  Disused  fire- 
places should  not  be  made  up  with  wood  or  paper.  They  should 
be  built  up  with  brickwork  or  metal,  especially  if  any  other  fire- 
places connected  with  the  same  flue  are  in  use.  A  fall  of  hot 
soot  is  liable  at  any  time  to  cause  trouble. 

Stoves  that  burn  wood  or  coal  may  be  divided  into  two  Stoves, 
general  classes — the  closed,  or  slow  combustion  stove,  and  the 
open  stove.  In  the  first  kind,  which  may  be  used  for  either  heat- 
ing or  cooking,  the  fire  is  fed  from  the  top,  the  draught  being 
provided  from  below.  These  stoves,  as  a  rule,  are  of  strong 
construction  and  do  not  touch  the  floor.  The  open  stoves  are  of 
endless  variety, — some  raised  on  legs  above  the  floor,  while 
others  are  placed  directly  upon  it.  The  danger  from  the  two 
classes  is  pretty  much  the  same,  except  that  in  the  slow  combus- 
tion stove  there  is  not  the  same  risk  of  the  ashes  falling  out  onto 
the  floor.  A  prominent  type  of  open  stove  is  known  as  the 
"Franklin."  Another  prominent  special  type  of  heating  stove  is 
known  as  the  "Air-tight." 

There  is  but  little  danger  from  heating  or  cooking  stoves  if  Hazards  of 
they  are  properly  installed  and  the  stovepipes  suitably  arranged.  Stoves. 
Although  an  overheated  stove  under  such  conditions  should  not 
cause  direct  trouble,  it  may,  indirectly,  be  fraught  with  serious 
results.  A  roaring  fire  carries  burning  particles  up  the  chimney 
to  fall  perhaps  on  a  dry  roof  or  to  set  fire  to  the  chimney  soot. 
Stoves  will  not  explode  with  ordinary  clean  fuel.      Explosions  are 


54  LECTURES  ON  FIRE   INSURANCE 

caused  by  covering  or  banking  the  fire  with  slack  coal  to  keep  it 
over  night.  Gas  and  fine  particles  of  carbon  accumulate  under 
the  blanket,  and  the  recovery  of  the  blaze  explodes  the  mixture. 
If  the  fire  pot  is  filled  too  full,  a  live  coal  may  be  pushed  out 
through  a  door  during  the  night,  as  coal  swells  when  it  burns. 
Stoves  should  always  have  metal  legs,  and  be  set  upon  a  zinc- 
covered  platform  extending  at  least  eighteen  inches  in  front  of  the 
hearth  and  fuel  doors.  They  should  be  set  at  least  eighteen 
inches  from  all  wooden  or  lath  and  plaster  walls  or  partitions. 
These  should  be  protected  by  metal.  There  should  be  an  air 
space  between  the  metal  and  woodwork  to  be  protected.  Stoves 
should  always  have  dampers  in  flues.  High  winds  may  cause  a 
hot  fire  which  cannot  be  controlled,  and  ceilings  or  walls,  if 
unprotected  and  too  near  flues,  may  be  set  on  fire.  (See  under 
Stovepipes.) 
Stovepipes.  Stovepipes  passing  through  closets,  unused  rooms,  blind  attics 

and  other  concealed  spaces  should  be  condemned.  They  should 
not  enter  chimneys  at  a  point  out  of  sight.  Stovepipes  of  six 
inches  or  less  diameter  passing  through  floors,  partitions,  sides  of 
buildings  and  roofs  are  dangerous  and  should  be  removed.  If 
allowed  to  remain,  they  should  be  protected  by  double,  metal, 
ventilated  thimbles,  so  arranged  as  to  m:iintain  at  least  a  six-inch 
clearance  between  the  pipes  and  combustible  material;  thimbles 
to  extend  at  least  three  inches  at  both  ends  beyond  the  surfaces 
protected.  vStovepipes  and  smokepipes  from  hot-air  furnaces 
more  than  six  inches  in  diameter  should  be  kept  at  least  twelve 
inches  from  combustible  partitions,  walls,  etc.,  and  be  protected 
by  double  metal  thimbles  or  equivalent.  Pipes  should  be  kept 
twenty-four  inches  below  combustible  ceilings,  or  else  they  must 
be  protected  in  the  same  manner  as  boiler  breechings.  (See 
under  Boilers.)  Stovepipes  should  not  enter  a  chimney  vertically, 
at  the  bottom  of  a  flue  starting  from  a  ceiling  above,  as  there  is 
danger  of  fire  from  burning  soot  falling  out  of  the  flue  through 
the  space  around  the  pipe. 
Kerosene  Kerosene  devices  have  caused  many  fires  in  the  past.    A  dozen 

Oil  Heating  years  ago  the  following  appeared  in  the  Ncxv  I'ork  hisurance 
and  Cooking  Press:  "The  fire  record  of  these  devices  is  largely  out  of  propor- 
Stoves.  Uon  to    the  number  in  use  for    heating  purposes,    and    the  only 

practical  method  of  eliminating  the  hazard  of  their  presence  appears 
to  be  that  of  entire  prohibition,  as  even  under  the  most  favorable 
conditions  of   use    in  experienced   hands,    they  have  proven  very 


COMMON  FIRE  HAZARDS  55 


dangerous."  In  late  years,  however,  one  does  not  hear  so  much 
about  fires  due  to  kerosene  oil  heating  stoves.  The  small  cook- 
ing stoves  have  practically  the  same  hazards  as  kerosene  oil  lamps, 
and  suggestions  under  that  heading  should  govern.  With  these 
portable  devices  there  is  always  the  human  element  to  be  reck- 
oned with,  that  cannot  be  governed  by  rules. 

These    systems,  such    as    stoves,  blow   torches,   and    furnaces   Kerosene 
have   the  same   hazards  as   those  of   lamps  and   the   same   general   Oil  Pressure 
conditions  apply.      Only  approved  apparatus  should  be  permitted, 
and     these    should    be    installed     according    to     the     Rules    and 
Requirements. 

The  use  of  gasolene  as  fuel  for  domestic  purposes  is  regarded   Gasolene 

from  an  insurance  viewpoint  as  much  more  hazardous  than  the  use   Stoves  for 

of  ordinary  fuel,  such  as  coal,  wood,  gas  and  coke,  and  where  used      °°  ,*"^*" 

.       ,  .    ,  rleating. 

the  hazard  should  be  recognized  by  underwriters    in   higher  rates 

of  premium.      If  permitted,  the  specifications   for  construction  of 

such   devices   and   for  regulating  the  same  must   be  observed    in 

order  to  secure  the  largest  measure  of  safety  to  life  and   property. 

Only  approved  apparatus  should  be  allowed.      Stove  must  always 

rest  on  the   floor  or  a  permanent  foundation  and   never  on   boxes, 

shelves  or  temporary  supports,  and   must   not  be  placed   in  prox- 

imitv  to  wooden  shelves,  cupboards  or  other  inflammable  material. 

Elements  entering  into  relative  danger  of  gas  stoves :   Con-   Gas  Stoves. 

struction,    method  of  connection  with  gas  supply  pipes,  pressure 

and  nature  of  the  gas  used,   surroundings  of  the  stoves,  protection 

of  surrounding  inflammable  materials  and  method  of  carrying  off 

waste  or  unburned  gases.      The  most  dangerous   hazard   is  use  of 

soft  rubber  tubing  connection  between  the  stove  and   the  supply 

pipe.      Only  rigid  iron  gas  pipe  connections  should   be    allowed. 

All  low  gas  stoves  should  be  mounted  on  iron  stands,  or  the  burners 

located  at   least  six  inches  above   the  base  of   the  stove  and   metal 

guard    plates    placed    four    inches    below    the    burners.       Stoves 

should  be  set  on  metal  with    air  space  beneath  or  on  marble,  tile, 

cement     or    the    like,    and    inflammable    surroundings    should   be 

properly  protected  by  metal  or  asbestos.      Enclosed  heating  stoves 

should    all   be   provided  with    as  good   flues  as  are  used    for   coal 

stoves,  and   open   gas    stoves,  such    as   hot  plates  or   gas   crowns, 

should  have  ventilated  metal  hoods  to  carry  off  any  escaping  gas. 

Fires    in   stoves   burning   natural    gas   sometimes   go  entirely  out 

under  low  pressure  and,  unless  the  stove  valves  are  shut  off,  the 

increase  in  pressure  would   quickly  fill  a  room  with  gas,  possibly 

causing  an  explosion. 


56 


LECTURES  ON  FIRE  INSURANCE 


Hot  Air 
Furnaces. 


Hot  Air 
Ducts. 


Hot  Air 
Registers. 


Hot  Water 
Heating. 


Furnaces  should  be  erected  upon  a  solid  foundation  of  brick 
or  stone,  with  hearth  of  brick,  stone  or  cement,  not  less  than  thirty- 
six  inches  wide  in  front  of  the  ash  pit.  The  top  or  dome  of  the 
furnace,  and  also  its  smokepipe,  should  not  be  less  than  twenty- 
four  inches  from  unprotected  woodwork  or  lath  and  plaster,  and 
its  side  walls  should  be  at  least  eighteen  inches  from  combustible 
material.  These  distances  may  be  reduced  to  twelve  inches  if 
the  furnace  is  protected  by  three  inches  of  asbestos  cement  or  its 
equivalent.  If  set  over  combustible  floors,  the  latter  must  be 
protected  as  specified  for  low  pressure  boilers. 

Hot  air  ducts  should  preferably  be  entirely  of  brick  or  hard 
burned  terra  cotta  tile,  properly  insulated  from  contact  with  wood- 
work or  other  combustible  material,  but  may  be  constructed  of 
expanded  metal  and  plaster,  or  of  bright  tin;  properly  supported 
and  insulated  by  air  space  of  not  less  than  two  and  one  half 
inches  from  all  exposed  woodwork  in  either  case.  If  constructed 
of  tin,  to  be  made  double  with  an  air  space  of  not  less  than  one 
half  inch  between  the  inner  and  outer  flues  when  passing  through 
or  within  wooden  or  lath  and  plaster  partitions;  and  the  outer 
pipe  to  be  ke^Dt  two  inches  from  the  woodwork.  Cold  air  ducts 
should  preferably  be  entirely  of  brick,  metal  or  other  non-com- 
bustible material,  but  may,  under  approved  conditions,  be  of 
wood  up  to  a  point  not  closer  than  five  feet  from  inlet  base  at 
furnace,  from  which  distance  the  construction  should  be  entirely 
of  brick,  metal  or  other  non-combustible  material.  The  duct 
should  extend  to  the  outer  side  of  the  building  wall  and  be 
provided  with  wire  net  or  grating  at  that  point. 

Hot  air  registers  when  placed  in  wooden  floors  or  wainscot- 
ing should  be  set  in  soapstone  frames  not  less  than  two  inches 
wide,  well  set  and  embedded  in  plaster  of  Paris.  Register  boxes 
where  passing  through  floors  or  wainscoting  should  be  made  of 
bright  tin,  having  joist  or  floor  timbers  framed  around  them  to 
leave  a  space  of  from  two  to  two  and  one-half  inches  on  all  sides 
according  to  the  size  of  the  box,  the  exposed  woodwork  to  be 
covered  with  bright  tin  on  all  sides,  extending  from  under  the 
soapstone  frame  to  and  under  the  ceiling  or  open  joist  below. 
At  least  one  register  of  any  system  should  always  be  kept  wide 
open,  either  by  the  removal  of  the  vanes  or  by  securely  wiring 
the  valve  to  prevent  its  being  closed. 

The  principle  on  which  all  systems  of  heating  by  the  circu- 
lation of  hot  water  depend   is   that   of  convection.      On  the  water 


COMMON  FIRE  HAZARDS  57 


becoming  heated  by  means  of  the  boiler  it  rises,  and  the  cold 
water  rushing  in  to  take  its  place,  a  current  is  created  through 
the  pipes,  which,  as  the  hot  water  passes  through,  become 
warmer  and  the  heat  passes  into  the  room  by  radiation.  The 
various  systems  in  use  may  be  divided  into  two  classes,  that  of 
the  small-bore  or  high  pressure,  and  that  of  the  large-bore  or  low 
pressure  system.  , 

Various  arrangements  may  be  used  for  heating  the  water  in 
the  high  pressure  systems,  depending  mainly  on  the  size  and  ex- 
tent of  the  premises  to  be  heated.  The  apparatus  in  its  simplest 
form  consists  of  metal  tubes  distributed  about  the  premises  in 
similar  manner  to  ordinary  heating  systems,  but  part  of  the  cir- 
cuit is  arranged  in  coils  which  are  placed  in  an  ordinary  coal 
burning  fireplace,  the  pipes  taking  the  place  of  the  usual  grate 
bars.  Where  a  large  apparatus  is  necessary,  the  coils  are  arranged 
in  an  iron  casing  or  furnace,  or  in  a  brick  built  furnace.  In  this 
way  the  whole  coil  is  exposed  to  the  direct  action  of  the  flames 
and  hot  gases,  the  water  is  heated  to  350°  Fahrenheit,  and  the 
pipes  are  subjected  to  a  pressure  of  500  pounds  and  upwards  to 
the  square  inch.  It  will  be  readily  seen  that  a  great  heat  can  be 
obtained  by  this  system,  and  it  is  necessary  that  great  care  should 
be  exercised  when  fixing  the  pipes  and  that  no  woodwork  or 
other  inflammable  material  be  allowed  in  immediate  proximity  to 
them.  These  systems  are  hazardous  and  they  should  not  be 
advocated. 

Heating  by  low  pressure  hot  water  systems  is  in  general  use. 
The  usual  type  of  sectional  heater  introduces  no  greater  hazard 
than  a  hot  air  furnace  and  should  be  treated  accordingly.  These 
systems,  as  a  whole,  however,  are  considered  safer  than  hot  air 
systems  as  ordinarily  installed. 

Boilers  of  the  sectional  type  usual  in  domestic  heating  and  Steam 
other  buildings  of  moderate  size  introduce  no  greater  hazard  than  Heating, 
a  hot  air  furnace  and  should  be  treated  accordingly.  These  sys- 
tems, as  a  whole,  however  are  also  considered  safer  than  hot  air 
systems  as  ordinarily  installed.  Low  pressure  boilers  of  the 
tubular  type,  in  which  the  steam  pressure  does  not  exceed  ten 
pounds,  are  frequently  used  in  large  buildings,  and  in  factories 
where  the  boiler  does  not  need  to  supply  steam  for  power  or 
manufacturing  purposes.  The  rules  governing  the  clearance 
between  the  arch  or  breeching  (smoke  flue)  are  the  same  as  for 
hot  air  furnaces. 


58  LECTURES  ON  FIRE  INSURANCE 

Steam  Pipes.  Steam  pipes  are  admitted  to  be  the  cause  of  many  fires.     They 

should  be  carefully  located,  properly  insulated,  and  reasonable  pre- 
caution should  be  taken  to  keep  them  from  wood.  When  fastened 
to  walls  at  sides  of  room,  near  the  floor,  combustible  material  is  apt 
to  accumulate  and  fire  results.  The  method  of  hanjjjing  pipes  over- 
head at  a  short  distance  from  the  ceiling  ob\iate&  this  risk  and  has 
been  shown  to  be  scientifically  correct. 

There  is  considerable  diversity  of  opinion  as  to  the  circum- 
stances under  which  such  fires  may  be  expected  to  occur,  and  the 
local  conditions  which  contribute  thereto.  It  is  self-evident  that 
the  hazard  is  materially  increased  where  the  heat  is  in  any  way  con- 
fined, or  where  contact  is  with  materials  more  flammable  than 
wood.  Particular  care  must  be  taken  to  guard  against  the  presence 
of  materials  which  are  notably  subject  to  spontaneous  ignition,  such 
as  celluloid,  coal  dust  and  oily  waste.  A  number  of  investigators 
who  have  attempted  to  produce  fires  by  bringing  steam  pipes  into 
contact  with  various  combustible  materials,  have  concluded  that 
any  steam  pipe,  no  matter  how  low  the  pressure,  would  in  course 
of  time  produce  charcoal,  and  that  when  this  stage  was  reached 
positive  danger  existed,  as  charcoal  is  subject  to  spontaneous  igni- 
tion. Where  steam  is  kept  on  a  system  continually,  there  is  less 
dano-er  than  where  on  intermittently,  according  to  some  investi- 
gators. The  reason  advanced  is,  that  when  allowed  to  cool  the 
charcoal  has  a  better  opportunity  to  absorb  oxygen  than  if  kept  hot 
at  all  times.  Another  factor  is  moisture.  Experiments  have 
shown  that  charcoal,  once  wet  and  dried  out  afterwards,  is  more 
dangerous  than  that  which  has  remained  dry,  ignition  points  being 
well  below  the  boiling  point  of  water  in  a  number  of  laboratory 
tests. 
Protection  There  are  two   general   methods  of  keeping  steam  pipes  free 

of  Steam         from  contact  with  combustible  material,  the  first  being  through  the 
Pipes.  *  use  of  an  insulator,  such  as  pipe  covering,  and  the  second  by  sup- 

porting them  rigidly  at  a  safe  distance.  Wherever  pipes  pass 
through  concealed  spaces,  covering  should  preferably  be  carried  for 
entire  length,  to  avoid  future  contact  with  substances  which  may 
get  into  these  spaces.  Care  should  be  taken  to  see  that  any  cover- 
ings or  lagging  which  may  be  used  is  composed  of  non-combustible 


•Read  "Fire  Dangers  of  Steam  Pipes,"  submitted  by  Independence 
Inspection  Bureau  in  :^uarterly  of  National  Fire  Protection  Association, 
January,  1911,  Vol.  4,  No.  3,  Page  312;  also  issued  in  pamphlet  form  by  the 
Independence  Inspection  Bureau. 


COMMON  FIRE  HAZARDS  59 

material.  Se^■eral  brands  of  pseudo-asbestos  and  sophisticated  in- 
sulating materials  have  been  found  on  the  market.  When  an  insu- 
lated steam  pipe  passes  through  a  partition,  the  lagging  should  pass 
through  as  well  and  not  be  cut  off  at  each  side  of  the  partition. 
This  point  should  be  carefully  examined.  Pipes  should  be  bushed 
with  metal  collars  where  passing  through  floor  or  combustible  par- 
titions, and  should  be  securely  supported. 

The  practice  of  combining  heating  and  ventilating  processes  Combination 
into  a  joint  system  is  based  upon  that  principle  of  physics  which   Heating  and 
demonstrates  the  difference  in  gravity  between  cold  (or  foul)  air    ventilating 
and  that  of  heated  air;  the  former  being  the  heavier  tends  to  fall,      ^ 
wdiile  the  latter  from  its  lightness  tends  to  rise,  these  differences  in 
density  serving  to  create  currents  of  opposite  direction,  whereby 
the  ascending  current  of  heated  air  displaces  the  cold  or  foul  air, 
which  then   falls  to   the   level   of  the  floor  of  any  enclosed  space, 
where  from  its  density  it  would  remain  stratified  unless  displaced 
by  agitation  or  by  liberation  through  vents  at  its  level.      Hence  in 
all  scientifically  planned  combined  heating  and  ventilating  systems 
where  natural  forces  are  utilized  as   means  of  operation,  the  vent 
ducts  for  the  escape  or  removal   of  cold  or  foul  air  are  located  at 
the  floor  level  of  an  enclosure,  and  when  properly  installed  insure 
successful   accomplishment    of   the   purpose    intended,    even    if    in 
arrangement  and  construction  such  system  may  not  always  present 
conditions   promising   immunity    from    fire   through   the   faults    of 
design  and  installation. 

The  means  of  obtaining  ventilation  may  be  divided  into  the   Natural  and 
two  broad  classes  of  natural  and  artificial.      In  natural  ventilation   Artificial 
no    machinery   is    used   to    distribute   the   air   through   the   rooms.    Ventilation. 
Artificial  ventilation   is  carried  on  by  the  aid  of  machinery,  or  by 
the   action   of   heat,    or   by   the   two   in   conjunction.      In  what    is 
known  as  the  vacuum   system,  a  fan  (or  fans)  draws  the  foul  air 
out  of  the  rooms,  the  fresh  air  finding  its  way  in  at  various  open- 
ings.     In  the  plenum  system,  which  is  largely  adopted,  the  fresh 
air  is  driven  into  the  building  by  a  fan  (or  fans)  and  the  polluted 
air  escapes  by  different  apertures  provided  for  it. 

Under  these  systems  of  heating  and  ventilation  are  to  be  found   Direct  and 
two  distinct  systems  respectively  known  as  the  "direct"  and  the   Indirect 
"indirect.''     Under    the    former    the    foul    and    dust-laden    air    is   Systems, 
carried  from  the  floor  of  the  rooms  through  ducts  or  flues  by  action 

*  Read  ^narferlv   of  National  Fire   Protection   Association,    October 
1907,  Vol.  1,  No.  2,  Page  62;  article  by  F.  M.  Griswold. 


60  LECTURES  ON  FIRE  INSURANCE 


of  the  heated  air  currents  which  disphice  the  foul,  and  these  flues 
deliver  the  foul  air  abo\e  the  roof  of  the  building,  thus  securing  the 
direct  ventilation  which  serves  to  indicate  the  method,  and  where 
svich  system  is  properly  installed  it  presents  the  least  hazard  of  these 
combination  systems.  The  "indirect"  system  seeks  to  secure  the 
removal  of  all  foul  or  cold  air,  not  only  from  the  area  of  the  room 
enclosures,  but  also  from  all  of  the  hollow  spaces  surrounding  the 
same,  including  the  spaces  between  the  floor  joists  and  the  partition 
studding ;  to  accomplish  this  end  the  area  of  space  between  the 
floor  joists  is  increased  by  nailing  two  by  four  wall  strips  across  the 
joists,  and  openings  are  made  through  partition  walls  from  the  joist- 
channels  to  the  spaces  between  the  studs,  thus  providing  a  complete 
maze  of  communicating  horizontal  and  \ertical  spaces,  accessible 
to  flame  while  inaccessible  to  means  of  insuring  rapid  combustion 
and  destruction  of  the  building  in  case  of  fire. 

Direct  and  indirect  systems  of  the  natural  type  may  be  used  in 
conjunction  with  furnace  heating.  The  same  conditions  apply  as 
under  ordinary  heating  systems.  Also  the  foul  air  ducts  should  be 
constructed  in  same  manner  as  suggested  for  hot  air  ducts,  but  may 
be  installed  with  not  less  than  one  inch  clear  space  to  woodwork. 
Ducts  should  not  be  connected  directly  with  heating  furnace  nor 
any  hot  air  or  smoke  flue,  but  preferably  to  a  special  flue  adjoining 
a  brick  smoke  or  hot  air  flue  carried  to  the  same  height,  but  separ- 
ated therefrom  by  not  less  than  four  inches  of  brick  work.  These 
systems  may  be  used  in  combination  with  steam  heating,  the  steam 
coils  being  placed  in  a  chamber  through  which  the  cold  air  is  drawn 
and  forced  over  them,  the  system  then  virtually  becoming  one  of 
hot  air.  Blowers  are  provided  for  this  purpose. 
Fire  Hazards  Principal   hazard   of  this  system   due  to  the  blower  or  intake 

Involved.  which  may  blow  a  fire,  originating  at  this  point,  through  the  build- 
ing. The  blower  should  be  kept  clean,  well  oiled  and  properly  ad- 
justed. Bearings  should  be  outside.  All  blowers  used  to  circulate 
air  through  heating  or  ventilating  pipes  in  liuildings  such  as  theatres, 
etc.,  with  openings  to  the  auditorium,  should  be  provided  with  a 
device  to  stop  the  blower  automatically  in  case  of  fire.  Fusible 
links  for  this  purpose  to  he  located  near  the  blower,  liotli  inside  and 
outside  the  pipe  leading  to  openings  in  the  auditorium.  Air  should 
be  taken  from  outside  through  an  intake  having  a  screened  opening 
and  located  so  as  to  be  safe  from  sparks.  Air  should  not  be  taken 
from  inside,  especially  if  there  is  any  inherent  danger  of  fire  start- 
ing at  that  point.      vSystems  arranged  to  circulate  air  liy  taking  air 


COMMON  FIRE  HAZARDS  61 


from  the  various  floors  through  suction  pipes  and  delivering  it  liack 
again  are  hazardous. 

Heating  by  means  of  electricity  is  a  comparatively  new  de-  Electricity, 
velopment.  but  there  is  no  doubt  that,  as  time  goes  on,  and 
cheaper  and  easier  means  of  utilizing  this  heat  are  discovered,  it 
will  come  into  much  more  general  use.  Heating  is  carried  on 
hy  means  of  radiation,  and  there  arc  three  general  types  of  ap- 
paratus. The  simplest  consists  of  open  resistance  wires  through 
which  the  current  passes,  which  act  as  the  heating  element. 
Toasters  and  grids  and  electric  car  heating  radiators  are  typical 
examples.  In  the  systems  in  most  general  use  at  the  present 
time  a  series  of  resistance  coils  is  embedded  in  a  special  enamel 
to  protect  the  wires,  the  whole  being  enclosed  in  suitable  metal 
cases.  Certain  types  of  heating  radiators,  and  most  of  the 
ranges,  stoves,  and  small  utilities,  such  as  water  heaters,  foot 
warmers,  flat  and  curling  irons,  dining  table  novelties,  etc.,  are 
made  on  this  principle.  In  another  class  of  heaters,  which  have 
been  adopted  for  use  as  room  heaters  and  ranges,  the  heating 
element  consists  of  a  system  of  incandescent  lamps  of  considerable 
size  and  special  shapes  arranged  in  a  suitable  screen  or  frame, 
which  radiates  the  heat.  In  these  lamps  the  vacuum  is  imperfect, 
and  the  oxygen  left  in  the  tubes  gives  the  required  heat. 

The  usual  precautions  should  be  taken  with  all  three  apparatus  Hazards, 
that  are  taken  with  other  heat-giving  elements,  as  well  as  the 
usual  precautions  with  regard  to  electric  wiring.  The  principal 
danger  consists  in  the  promiscuous  use  of  the  devices  that  can 
readily  take  current  from  light  sockets,  with  the  consequent 
danger  of  overloading-  the  circuits.  The  other  great  source  of. 
danger  arises  from  carelessness  in  leaving  the  irons  and  other  ap- 
paratus about  on  inflammable  material  with  the  current  on. 

All  main  chimneys  for  fireplaces  or  furnaces  should  be  well  Chimneys 
and  securely  built  from  the  ground  up  and  through  the  building  and  Flues." 
to  a  point  at  least  three  feet  above  flat  roof  and  two  feet  above 
ridge  of  peak  roof  of  such  building;  the  walls  of  chimneys  should 
be  of  stone  or  brick  at  least  eight  inches  in  thickness  (if  fire- 
place is  of  stone  same  must  be  twelve  inches  thick),  and  begin- 
ning with  foundation,  such  brick  or  stone  work  to  be  laid  in 
cement  mortar  up  to  the  first  floor,  and  thence  above  to  a  point 
where  chimney  protrudes   through  the  roof  of  building  the  brick 

*Read  F.  C.  Moore,  "How  to  Build  a  Home— The  House  Practical." 


62  LECTURES  ON  FIRE  INSURANCE 


or  stone  work  may  be  laid  in  good  lime  or  fire-clay  mortar,  and 
brick  work  carefully  bonded  or  anchored  together.  From  and 
above  the  roof  to  top  of  chimney  the  brick  or  stone  work  shall  be 
laid  in  cement  mortar  and  properly  capped.  All  joints  to  be 
struck  smooth  on  inside,  except  when  lined  with  burnt  clay  or 
terra  cotta  pipe. 

In  brick  buildings  the  walls  of  building  when  not  less  than 
thirteen  inches  in  thickness,  may  form  part  of  chimney  or  flue. 
In  no  case  shall  a  chimney  or  flue  be  corbeled  out  more  than  eight 
inches  from  the  wall  and  in  all  cases  the  corbeling  should  consist 
of  at  least  five  courses  of  brick.  Flues  in  party  walls  not  to 
extend  beyond  the  center  of  said  walls.  When  two  or  more 
separate  flues  are  provided  in  chimney,  the  division  walls  between 
flues  may  be  only  four  inches  in  thickness.  No  chimney  should 
be  started  or  built  upon  any  floor  or  beam  of  wood.  When  a 
chimney  or  flue  is  to  be  cut  off  below,  in  whole  or  in  part,  it 
should  be  wholly  supported  by  brick  or  stone  work,  properly 
erected  from  the  ground  up.  Single  chimneys  or  flues  for  stoves 
or  kitchen  ranges  may  have  the  walls  only  four  inches  in  thick- 
ness. The  upper  part  of  chimney  or  flue  walls  may  be  only  four 
inches  in  thickness  from  a  point  at  least  six  inches  above  the  roof 
covering  of  building  to  the  top  of  chimney  or  flue,  provided  the 
chimney  or  flue  be  capped  with  terra  cotta,  stone  or  cast  iron,  or 
carefully  bonded  or  anchored  together. 

All  wooden  beams  should  be  "trimmed"  away  from  flue  in 
chimneys,  whether  the  same  be  smoke  or  hot  air.  The  "trim- 
mer" beam — /.  e.,  the  one  that  runs  parallel  with  the  side  of  the 
chimney — should  be  not  less  than  ten  inches  from  the  Inside  face 
of  the  flue  and  not  less  than  two  inches  from  the  outside  of  the 
chimney  breast,  and  the  header  beam  not  less  than  twenty  inches 
from  the  outside  face  of  the  brick  or  stone  work  of  the  chimney. 
If  the  flue  is  intended  for  boilers  or  furnaces,  the  "trimmer" 
beam  should  never  be  less  than  sixteen  inches  from  the  inside  of 
the  flue.  The  header  beam,  in  front  of  a  fireplace,  which  sup- 
ports the  "trimmer"  arch  and  which  carries  the  "tail"  beams  of 
the  floor,  or  those  beams  which  are  mortised  into  it,  should  be  not 
less  than  twenty  inches  from  the  chimney  breast.  It  is  needless  to 
say  that  no  wood  casing,  furring  or  lath  or  other  woodwork 
should  be  placed  in,  against,  or  within  two  inches  of  chimney  or 
flue. 


COMMON  nRE  HAZARDS  63 


3.    POWER 

(Including:  Transmission) 

Although  wheel  pits  are  more  or  less  clamp  and  wet  at  all  Water, 
times,  fires  are  apt  to  originate  there.  The  heavy  bearings  if 
neglected  heat  up  and  ignite  the  surplus  gummed  grease  that 
accumulates.  Lint  and  other  inflammable  material  often  accumu- 
late in  this  place.  Such  places  should  always  be  protected  by 
automatic  sprinklers.  Tailraces  should  also  receive  thought  and 
care.  Burning  material,  such  as  kerosene,  may  float  into  them 
upon  the  surface  of  the  water.  Water  wheels  should  preferably 
be  located  outside  of  main  factory,  but  may  be  located  inside  a 
factory  of  standard  mill  construction. 

Few  fires  have  originated  within,  or  directly  due  to  presence  Steam, 
of,  a  steam  engine.  One  or  two  fires  have  been  recorded  due  to 
the  combustion  of  the  wooden  lagging  from  long  contact  with  the 
cylinder  of  the  engine.  The  low  basements  which  prevail  under 
an  engine  room  floor,  and  in  the  pits  around  the  engine  or  fly 
wheel,  are  apt  to  be  the  breeding  spots  of  fire,  due  to  the  col- 
lection of  oil,  oily  waste  and  other  combustible  material.  In  a 
building  of  standard  mill  construction,  engine  must  be  located 
in  a  one  story  cut-off  section.  Steam  mains  from  boiler  to  engine 
should  be  well  protected  by  insulating  lagging.  As  these  mains 
carry  steam  at  high  pressure,  and  perhaps  superheated,  great  care 
should  be  taken  to  protect  pipes  if  they  pass  through  or  near  any 
combustible  material. 

Only  approved  engines  should  be  allowed,  and  they  should  be  q^s  Engines, 
installed  according  to  the  rules  which  have  been  made.  Engines 
should,  whenever  possible,  be  located  on  the  ground  floor  and  in 
rooms  where  inflammable  flyings  prevail,  the  engine  should  be 
enclosed  in  a  compartment  well  ventilated  to  the  outer  air.  If 
located  on  a  wooden  floor,  the  floor  under  and  twenty-four  inches 
outside  of  the  engine  must  be  covered  with  metal.  Piping  should 
be  provided  with  a  shut-off  valve  located  in  an  accessible  place 
on  the  service  side  of  the  pressure  regulator,  and  the  piping  and 
connections  must  run  as  direct  as  possible  and  thoroughly  tested 
before  being  placed  in  service. 

The  principal   hazard  consists    in   the  muffler  or  exhaust   pot   Hazards 
and   the    exhaust    pipe.      These    are  liable   to   become   very   hot. 
Muffler  or  exhaust   pot  should   be  placed   on  firm  foundations  and 
kept   at    least    one    foot   from  woodwork  or  combustible  materials 


64 


LECTURES  ON  FIRE  INSURANCE 


Gas 

Regulator, 


Gasolene 
Engines. 


and  covered  with  approved  non-combustible  materials  and  covered 
with  approved  non-combustible  insulating  material  of  a  thick- 
ness proportionate  to  the  size  of  the  device,  in  no  case  to  be  less 
than  three  quarters  of  an  inch.  Exhaust  pipes  should  extend  to 
the  outside  of  the  building  and  be  kept  properly  supported  at 
least  six  inches  from  any  woodwork  or  combustible  material,  and 
if  run  through  floors  or  partitions  to  be  provided  with  ventilated 
thimbles  at  least  six  inches  larger  in  diameter  than  the  pipe,  and 
the  vertical  portion  of  a  pipe  that  passes  through  a  floor  to  be 
covered  with  approved  non-combustible  insulating  material.  As 
these  pipes  are  liable  to  become  very  hot,  they  should  have  ad- 
ditional protection  where  dust  or  inflammable  flyings  are  present. 

This  is  an  apparatus  designed  to  equalize  the  gas  pressure 
between  the  meter  and  engine  (the  source  of  supply  and  the  gas 
engine),  regardless  of  the  variations  in  pressure  in  the  gas  sys- 
tem, and  automatically  shut  off  the  supply  when  engine  stops. 
Onlv  an  approved  apparatus  should  be  allowed.  This  device 
consists  mainly  of  three  parts,  a  cast-iron  enclosure  consisting  of 
two  castings  bolted  together,  a  leather  diaphragm  held  between 
these  two  castings,  and  a  valve  which  controls  the  admission  of 
gas  to  the  upper  part  of  the  enclosure  and  thence  to  the  engine. 
The  controlling  valve  rises  only  when  the  engine  takes  the  in- 
duction charge  or  when  raised  by  hand  by  means  of  an  eccentric, 
which  is  employed  when  starting  the  engine.  The  diaphragm  is 
made  of  skin  and  separates  the  interior  portion  of  the  two  castings 
into  an  upper  and  lower  chamber.  A  suction  of  gas  at  the  engine 
produces  a  partial  vacuum  in  the  upper  portion  of  the  equalizer 
and  thus  causes  it  to  rise  at  the  center.  This  raising  of  the 
diaphragm  transmits  its  motion  to  the  valve,  which  is  consequently 
raised  and  thus  allows  the  admission  of  gas.  With  all  parts 
assembled,  there  is  no  possibility  of  gas  escaping  into  the  room, 
as  there  is  a  vent  which  is  piped  to  the  outside  and  vent  pipe  is 
provided  with  a  valve  to  detect  any  possible  leakage  of  gas  past 
the  diaphragm. 

They  should  be  located  in  a  manner  similar  to  gas  engines. 
Supply  tank  must  be  located  outside  the  building,  underground 
where  possible,  at  least  thirty  feet,  but  never  less  than  five  feet, 
removed  from  all  buildings  and  below  the  level  of  the  lowest  pipe 
in  the  building  used  in  connection  with  the  apparatus.  If  im- 
practicable to  bury  the  supply  tank,  the  same  may  be  installed  in 
a  non-combustible   building  or  vault,  properly  ventilated,  prefer- 


COMMON  FIRE  HAZARDS  65 


ably  from  the  bottom,  always  remembering  that  the  tank  must  be 
below  the  level  of  the  lowest  pipe  in  the  building  used  in  con- 
nection with  the  apparatus.  Specific  rules  govern  the  installa- 
tion of  piping,  which  should  always  be  observed.  Muffler  or 
exhaust  pot  and  exhaust  pipe  to  be  treated  as  for  gas  engine,  and 
the  same  rule  to  apply  to  care  and  attendance. 

They  are  a  substantially  constructed  internal  combustion  Fuel  Oil 
engine  designed  to  operate  on  crude  oil,  distillates  or  kerosene.  Engines. 
They  utilize  the  heat  of  combustion  and  compression,  retained  in 
the  walls  of  a  special  vaporizing  chamber,  for  igniting  the  charge. 
Initial  heating  is  accomplished  by  a  stationary  gas  or  kerosene 
blow  torch.  The  same  rules  for  installation,  etc.,  apply  as  for 
gasolene  engines.  Crude  oil  possesses  characteristics  similar  to 
those  of  gasolene,  and  its  storage  and  use  should  be  similarly  safe- 
guarded. 

In  the  most  familiar  process  of  gas  making,  the  manufacture  Producer  Gas 
of  coal  gas,  tlie  coal  is  subjected  to  destructive  distillation.  The  Systems, 
resulting  gas  is  high  in  illuminating  qualities  and  has  a  relatively 
high  heat  value.  In  this  process  a  valuable  by-product  is  coke. 
In  another  process  of  making  gas  from  coal  a  moderate  supply  of 
air,  with  or  without  vapor  or  steam,  is  passed  through  a  thick 
fuel  bed.  By  the  proper  regulation  of  this  air  supply  a  partial 
or  incomplete  combustion  of  the  fuel  is  maintained,  resulting  in 
the  gradual  consumption  of  all  the  combustible  matter.  The 
coke,  instead  of  remaining  as  a  by-product,  as  in  the  process 
previously  mentioned,  is  utilized  in  making  the  gas.  Gas  gen- 
erated by  this  method  is  known  as  producer  gas,  and  the 
apparatus  in  which  the  gas  is  made  is  called  the  gas  producer. 

Three  distinct  types  of  these  plants  have  been  commercially  Types, 
manufactured  in  the  United  States:  (a)  the  suction  type;  (b)  the 
pressure  type,  and  (c)  the  down-draft  type.  Besides  these  three 
a  combination  of  the  principles  of  up-draft  and  down  has  recently 
been  brought  forward  in  the  double-zone  producer.  Probably  7-) 
to  80  per  cent  of  the  demand  for  power  is  for  units  below  oOO 
h.  p.  For  such,  where  suitable  fuel  is  available,  the  suction  plant 
is  primarily  designed.  They  costless,  occupy  less  space,  require 
less  labor  and  have,  perhaps,  a  little  higher  efficiency  in  daily 
service,  especially  if  the  pressure  plant  has  an  independent  boiler. 
By  combination  of  units  any  desired  horse  power  can  be  attained. 
They  may  also  be  modified  to  deliver  gas  under  pressure,  an  ex- 
pedient especially  serviceable  where  gas  is  desired  for  heating 
and    power. 


66  LECTURES  ON  nRE  INSURANCE 


Suction  Pro-  The  essential  parts  of  a  suction-producer  plant  are  the  gas  gen- 

duccr  Plants,  erator  or  furnace,  the  steam  generator  or  boiler,  and  the  gas  cleaner 
or  scrubber.  A  fire  is  made  with  shavings,  wood,  etc.,  on  the  grate, 
a,  (Fig.  1)  of  the  gas  generator,  the  air  necessary  for  combustion 
being  supplied  by  means  of  the  blower  shown  at  /.  As  soon  as  the 
fire  is  sufficiently  kindled  the  fuel  to  be  used  for  gas  making — 
charcoal,  coke,  or  anthracite — is  gradually  charged  into  the  pro- 
ducer. The  blower  for  the  air  supply  is  driven  by  hand,  or  in  large 
plants  by  electric  or  other  power,  until  gas  of  sufficiently  good 
quality  to  operate  the  engine  is  generated.  The  quality  of  the  gas 
is  roughly  ascertained  by  means  of  a  test  cock  at  which  the  gas  is 
lighted.  As  soon  as  the  test  flame  shows  the  right  color,  which  can 
be  readily  determined  after  a  little  experience,  the  gas  is  turned  into 
the  engine.  The  smoke  and  poor  gas  developed  during  the  early 
stages  of  combustion  are  discharged  into  the  outside  air  by  means 
of  the  purge  pipe  shown  at  c.  As  soon  as  the  engine  is  started 
the  blowing  of  the  producer  is  stopped,  and  the  necessary  com- 
bustion is  drawn  into  the  base  of  the  producer  by  means  of  the 
engine  cylinder.  At  b  is  shown  the  steam  generator  or  boiler 
for  this  particular  type  of  producer.  Steam  at  atmospheric  pres- 
sure is  generated  by  the  heated  gas,  which  leaves  the  producer  at 
the  point  d  and  enters  the  boiler  through  the  pipe  e  on  its  way  to 
the  scrubber.  The  steam  thus  generated  is  picked  up  by  the  air 
supply  passing  into  the  base  of  the  producer.  The  mixture  of 
air  and  steam  is  then  drawn  up  through  the  incandescent  fuel 
bed.  The  oxygen  of  the  air  and  the  oxygen  of  the  steam  combine 
with  the  highly  heated  carbon  in  the  lower  part  of  the  bed,  pro- 
ducing complete  combustion  and  developing  carbon  dioxide.  The 
gas  thus  formed  passes  up  through  a  thick  fuel  bed  above  and  the 
carbon  dioxide  is  largely  reduced  to  carbon  monoxide.  The 
hydrogen  liberated  by  the  decomposition  of  the  steam  greatly 
enriches  the  product. 
Purifying  the  ^^^  ^^^  ^^^^^  leaving  the  boiler  at  the  point  f  passes   to  the 

Gas.  base   of  the   scrubber  g-.      The  scrubber   is  usually  a  cast-iron  or 

sheet-steel  tower  in  which  the  dust,  soot,  tar  and  other  impurities 
are  removed  from  the  gas.  As  usually  constructed  it  consists  of 
a  simple  cylindrical  shell  filled  with  coke,  over  which  water  is 
sprayed.  The  dirty  hot  gas  enters  the  base  of  the  scrubber  and 
flows  upwards;  it  is  divided,  in  passing  through  the  coke,  into 
separate  streams  which  are  met  by  a  fine  water  spray  flowing  in 
the  opposite  direction.      The  gas  and   the  water  are  thus   brought 


COMMON  FIRE  HAZARDS 


67 


FiGxjHE  1. — Sectional  view  of  suction  gus-producer  power  plant. 


into  intimate  contact  and  the  particles  of  dirt  and  other  foreign 
matter  carried  by  the  gas  are  largely  washed  out.  The  wash 
water  from  the  scrubber  passes  into  a  water  seal  shown  at  //,  from 
which  it  overflows  into  the  drain,  or,  in  large  installations,  into  a 
settling  basin  or  reservoir.  If  the  gas  is  to  be  used  in  an  engine 
it  is  essential  that  it  be  thoroughly  freed  from  gritty  material  in 
order  to  prevent  scouring  of  the  engine  cylinders.  It  is  equally 
mportant  that  tarry  compounds  be  removed,  in  order  to  prevent 
clogging  of  the  engine  valves  and  governor.  The  gas  enters  the 
scrubber  at  a  relatively  high  temperature  (500"  to  1,000°  F. )  and 
leaves  it  at  about  atmospheric  temperature,  going  to  the  engine  as 
a  comparatively  dry,  clean,  cool  gas.  In  some  plants  after  the 
gas  leaves  the  wet  scrubber  it  is  passed  through  a  dry  scrubber. 
This  consists  of  a  chamber  filled  with  excelsior,  shavings  or  other 
similar  material  which  removes  a  large  portion  of  the  moisture 
and  also  tends  to  take  out  any  of  the  impurities  which  may  have 
escaped  the  water  spray.  Just  before  passing  to  the  engine  the 
gas  is  usually  carried  through  some  form  of  expansion  chamber 
or  regulating  tank  which  serves  to  prevent  serious  fluctuations  in 
the  draft  through  the  fuel  bed  and  also  tends  to  supply  the  engine 
uniformly  with  gas. 

The   gas,    together   with    enough    air   to    form    an   explosive   Action  of 
mixture   with    it,  is  drawn    into  the   engine   cylinder    during    the   the  Engine, 
suction    stroke.      One    of   the    advantages    of   the   suction   type  of 
producer  is  that   the  supply  of  air  and  steam  passing  through   the 
fuel    bed,    and    consequently   the   quantity    of    gas    generated,    is 
largely  regulated  by  the  demands  of  the  engine. 


68 


LECTURES  ON  FIRE  INSURANCE 


Fuels. 


Pressure 

Producer 

Plants. 


Producer 
Hazards. 


Fuels  containing  a  large  percentage  of  tar  are  not  suitable 
for  use  in  the  suction  producer,  hence  the  fuels  regularly  used  in 
such  plants  are  charcoal,  coke  and  anthracite.  Gas  producers  are 
ordinarily  charged  with  coal  by  filling  some  form  of  hopper 
either  by  hand  or  from  an  overhead  chute.  By  releasing  the 
"bell"  or  conical  casting  closing  its  lower  opening  the  charge 
falls  and  is  fairly  spread  in  the  producer.  The  attendant,  using 
a  spreading  bar  inserted  through  the  poker  holes  in  the  top  plate, 
completes  its  distribution  The  Bildt  automatic  feed  continuously 
delivers  the  coal  in  a  shower  from  the  deflecting  surfaces  of  a 
constantly  rotating  distributer.  It  has  a  storage  magazine,  re- 
quiring filling  at  longer  intervals  than  in  ordinary  charging. 

Like  the  suction-producer  plant,  the  up-draft  plant  has  as  essen- 
tial parts  a  gas  producer  or  generator,  a  steam  generator  or  boiler, 
and  a  gas  cleaner  or  scrubber.  Pressure  producers  were  devised  to 
meet  the  demand  for  the  concentration  of  power  in  fairlv  large  units 
instead  of  the  separate  operation  of  a  large  nunil^cr  of  installations 
of  small  j)ower  capacity.  These  producers  develop  their  gas  under 
a  slight  pressure  due  to  the  introduction  of  the  air  and  steam  blasts, 
and  the  gas  is  stored  in  holders  until  requiretl  by  the  engine.  As 
the  generation  of  the  gas  does  not  depend  on  the  suction  stroke  of 
the  engine,  tar  and  other  impurities  may  be  removed  from  it  by 
suitable  de\  ices,  and  hence  the  use  of  liituminous  coal,  lignite,  and 
peat  is  possible.  \'arious  details  of  design  are  modified  by  different 
manufacturers.  Some  of  these  changes  are  made  simplv  to  satisfy 
the  recjuirements  necessarv  to  obtain  a  patent  ;  others  are  made  with 
the  idea  that  they  are  decided  improvements.  A  gas  holder  is  also 
regarded  as  entirely  unnecessary  by  many.  Plants  of  several  types 
are  manufactured  without  such  holders  and  are  proving  eminently 
satisfactory  in  commercial  practice.  In  discarding  the  holder  it  is 
of  course  necessary  to  introduce  automatic  devices  for  controlling 
the  pressure  and  the  supply  of  gas  to  the  engine. 
Gas  Taken  as  a  whole  the  hazard  introduced  by  a  producer  plant  of 

the  suction  type,  well  installed  and  properly  cared  for,  is  small. 
When  placed  within  the  building,  the  room  where  producer  is 
installed  should  be  a  cut-off  room  of  fire-resistive  construction,  well 
\  entilated  at  top  and  bottom.  Only  metal  charging,  platforms  and 
ash  cans  should  be  provided.  Care  should  be  taken  when  shutting 
down  and  lighting  the  burners.  \"ent  connections  should  always 
be  opened  at  such  times.  The  heat  energy  of  producer  gas  is  about 
120  B.  T.  U.      As  compared  with  naphtha  gas,  about  2,000  H.  T. 


COMMON  nRE  HAZARDS  69 


U.,  this  is  very  small.  These  figures  give  about  the  relative  power 
of  an  explosion  clue  to  these  gases.  Explosions  of  producer  gas 
have  taken  place  and  are  usually  due  to  tardiness  in  lighting  burners 
when  starting  up  or  neglect  to  turn  off  gas  in  producer  when  clos- 
ing down.  The  explosions  take  place  inside  the  apparatus  and  in 
all  probability  would  relie^  e  themselves  through  the  explosion  vents 
installed  for  the  purpose  or  lift  the  poke  hole  vents  or  feeding 
device,  these  not  being  tightlv  secured  to  top  of  producer.  It 
should  be  noted  that  the  installation  of  suction  gas  producers  in 
cellars,  basements,  or  other  places  where  artificial  light  will  be 
necessary  for  their  operation,  or  where  proper  ventilation  cannot 
be  obtained,  is  considered  hazardous  and  should  not  be  permitted 
except  by  special  permission  of  the  imderwriters  ha\'ing  jurisdic- 
tion. If  the  producer  has  a  capacitv  of  more  than  '250  h.  p.,  it 
must  be  located  in  a  detached  building. 

Pressure  svstems  are  considered  more  hazardous  than  producers 
of  the  suction  type.  They  should  be  located  in  a  special  building 
approved  for  the  purpose,  at  such  distance  from  other  buildings  as 
not  to  constitute  an  exposure  thereto,  excepting  that  appro\ed  pres- 
sure systems  without  gasometer  having  a  maximum  capacity  not 
exceeding  250  h.  p.  and  with  pressure  in  generator  not  exceeding 
two  pounds.  ma\-  lie  located  in  the  building,  pr()\'ided  that  the 
generator  and  all  apparatus  connected  therewith  be  located  in  a 
separate  fireproof  room,  well  Acntilated,  to  the  outside  of  the  build- 
ing. In  all  other  respects  the  apparatus  must  comply  witli  the 
requirements  for  suction  systems. 

All  electric  power  systems  and  equipments  should  be  installed  Electric 
in  strict  conformit\-  to  the  National  Electrical  Code.  Especial  care  Power. 
should  be  taken  with  the  installation  of  motors  in  rooms  where 
inflammable  vapors,  etc.,  may  be  present.  Care  should  be  used  to 
keep  motor  starters  in  good  condition.  Careless  use  of  tools  around 
live  conductors,  hastv  boring  of  holes  through  partitions  carrying 
charged  cables,  slipping  of  members  and  pinch  bars  in  the  \icinitv 
of  bus-bars,  and  cutting  t)ut  fuses  by  copper  jumpers  across  the 
terminals  are  common  troubles  experienced  in  power  systems. 

The  principal  hazards  of  power,  especially  of  the  type  in  most    Hazards  of 
general  use,  is  that  of  transmission.      The  fi\e  means  of  transmitting   Trans- 
power  are  by  shafting,  belt   drives,  rope  drives,  chain   drives  and   "fission, 
direct  connected  electric  motors.     The  last  may  be  eliminated  from 
this  part   of  the  discussion   as  being  a  hazard  of  electricity,  \\-hich 
has  already  been  suitabh-  discussed. 


70 


LECTURES  ON  FIRE  INSURANCE 


Shafting. 


Belt  Tests. 


Belt  Box 

Hazard. 


Many  fires  art-  caused  by  shaftinj^-.  All  shaftiny-  should  be 
well  hun^- and  pr()\ided  with  self-oilinj^  bearings.  Bearinii^s  should 
be  kept  clean  and  combustible  material  not  allowed  to  collect  on  or 
around  them.  Shavings  should  not  be  placed  in  concealed  spaces, 
especially  where  liable  to  catch  fly  and  other  inflammable  material. 
In  sprinklered  factories,  shafting  in  low  basements  or  in  trenches, 
in  locations  otherwise  unprotected,  should  huxe  lines  of  sprinklers 
overhead. 

Numerous  fires  ha\e  been  caused  by  pulleys,  especially  the 
wooden  pidley.  The  nature  <jf  l)elt  used  and  the  speed  of  the 
machinery  are  all  factors  which  influence  the  fire  hazard.  Exhaus- 
tive tests  were  made  under  the  direction  of  the  Miller's  Mutual  Fire 
Insurance  Companies  on  the  use  of  cam  as  belts,  rubber  belts  and 
leather  belts  on  both  wooden  and  iron  pulleys.  Details  of  these 
tests  are  giyen  in  the  October,  l!»ll,  Quarterly  of  the  National  Fire 
Protection  Association,  The  experiments  pro\ed  that  the  ovAx  safe 
combination  is  the  can\as  belt  on  an  iron  pulley.  Increasing  the 
pulley  speed  or  increasing  the  tension  on  the  belt  undoubtedly 
increases  the  hazard.  The  tests  with  rul)l)er  belts  on  wood  pulleys 
indicate  that  this  is  a  \  ery  dangerous  combination. 

Rope  dri\es  are  coming  into  use  quite  extensi\-elv.  In  general, 
the  hazard  of  transmission  is  much  reduced  bv  this  method.  How- 
eyer.  it  is  frequently  customary  to  enclose  the  rope  dri\  es  in  boxes, 
especially  in  positions  where  they  haye  replaced  shaft  dri\es  and 
would  be  exposed  to  the  weather.  Care  must  be  then  taken  to  see 
that  the  boxes  or  chutes  are  of  ample  size,  to  pre\'ent  the  liability 
of  the  rope  striking  and  grinding  against  the  bcjx. 

Chain  drives  are  also  coming  into  more  general  use.  and  they 
offer  an  excellent  means  of  transmission  from  the  fire  hazard  point 
of  view. 

A  ^•ery  important  hazard  in  connection  with  belt  transmission 
iv  that  of  the  belt  box.  The  maximmn  danger  of  the  spread  of  fire 
is  to  be  found  in  conditions  which  admit  of  its  going  from  storv  to 
story,  especially  if  increased  by  construction  which  forms  drafts. 
For  this  reason,  boxes  or  shafts  for  carrying  belting  should  be  fire- 
])roof  and  so  arranged  as  to  prexent  fire  in  lower  stories  from  going 
into  those  abo\e.  The  ideal  in  construction  is  where  these  belt 
boxes  are  in  a  fireproof  building  or  tower,  the  dri\ing  pulleys  being 
on  the  tower  side,  with  the  bearing  in  the  wall  arranged  for  oiling 
on  the  mill  side,  so  that  the  shaft  works  in  a  light  box  through 
which    fire   cannot    pass.      In   man\   cases   lielts   pass  through  floors 


COMMON  FIRE  HAZARDS  71 


Avithout  any  protection  whatt-xcr,  or  arc  carried  in  wooden  boxes 
which  are  dirty  with  flyinj^'s  and  ignitilile  fluff,  besides  being  oil- 
soaked  and  liable  to  burn  like  cinder. 

4,    BOILERS 

(Including:  floes  and  stacks) 
The  ordinary  low  pressure  boilers  used  for  heating  purposes 
have  been  treated  under  the  head  of  Heating.  Boilers  operating 
at  a  pressure  above  ten  pounds  are  considered  as  high  pressure 
boilers.  Irrespective  of  the  hazards  of  location,  installation  and 
operation,  tire  insurance  companies  are  indirectly  much  interested 
in  the  type  of  boiler,  for  fires  frequently  follow  a  boiler  explosion. 
The  West  Lynn  conflagration  and  the  Grove  Factory  disaster  at 
Brockton,  Mass.,  are  comparatively  recent  conspicuous  examples 
of  fires  which  may  arise  from  boiler  explosions. 

Boilers  are  divided  into  the  two  broad  classes  of  shell  and  Shells. 
sectional.  The  latter  type  was  mentioned  under  Heating.  The 
shells  of  boilers  mav  be  of  lap  seam  or  butt  and  strap  construc- 
tion. The  edges  of  the  boiler  plates  are  either  lapped  over  and 
riveted,  or  brought  edge  to  edge  and  then  joined  by  a  cover-plate, 
which  is  riveted  to  each  of  the  two  plates.  The  first  mentioned 
makes  a  lap  joint  and  the  second  a  butt  joint.  In  either  construc- 
tion the  plates  may  be  either  single,  double  or  triple  riveted,  the 
strength  being  increased  in  each  instance.  A  butt  joint  is  always 
to  be  preferred  over  a  lap  joint,  and  in  Massachusetts  (and  some 
other  states)  lap  seam  boilers  are  no  longer  allowed  for  high 
pressure  work.  Pnitt  joints  may  have  two  cover-plates,  one  out- 
side and  one  inside.  The  outer  cover-plate  is  narrow,  with  rivets 
placed  close  enough  together  to  provide  for  sound  calking.  The 
inner  plate  is  wider,  and  as  its  edges  are  not  calked  they  may  have 
a  row  of  more  \\idely  spaced  rivets. 

Boilers  are  of  the  cylindrical  tubular  type  or  water  tube  Tubular 
boilers,  which  are  a  combination  of  shell  and  sectional.  The  Boilers. 
tubular  boilers  hiwc  an  external  shell  made  as  described,  contain- 
ing a  large  body  of  water.  Heat  is  communicated  to  the  water 
through  the  shells  or  through  the  sides  of  internal  furnaces,  and 
also  by  carrying  the  gases  through  tubes  or  flue.  The  ordinary 
tubular  boilers  have  numerous  fire  tubes  passing  through,  com- 
monly haxing  a  diameter  of  three  or  foiu"  inches.  About  two 
thirds  of  the   \  olume   of  the  boiler  is  filled  with  water,  the   other 


72 


LECTURES  ON  HRE  INSURANCE 


Locomotive 
Boilers. 


Flue  Boilers. 


Scotch 
Marine 
Boilers. 

Vertical 
Boilers. 


Boiler 
Hazards. 


third  being  reserved  for  steam.  Tlie  water  line  is  six  or  eight 
inches  above  the  top  row  of  tubes. 

Boilers  of  the  locomotive  tvpc  are  often  used  for  small  fac- 
tories, or  where  steam  is  required  temporarily.  The  locomotixe 
boiler  consists  essentiallv  of  a  rectangular  fire-box  and  a  cylindrical 
barrel  through  which  numerous  tubes  pass  from  the  fire-box  to  the 
smoke-box,  which  form  a  continuation  of  the  barrel,  and  from 
which  the  products  of  combustion  pass  up  the  smokestack.  The 
tubes  are  smaller  and  spaced  closer  together  than  in  the  ordinary 
tubular  boiler,  and  the  boiler  operates  under  a  strong  forced 
draft,  produced  bv  throwing  the  exhaust  up  the  smokestack. 
This  type  has  no  permanent  foundation,  but  it  is  supported  on 
brackets  at  the  fire-box,  and  bv  a  pedestal  bearing  on  rollers  near 
the  back  end. 

The  cvlindrical  flue  boiler  differs  from  the  tidiular  boiler 
mainh'  in  replacing  the  fire  tubes  by  one  or  more  large  flues. 
This  type  of  boiler  is  usually  longer  than  a  tubular  boiler,  but  it 
has  less  heating  surface  and  is  less  efficient  in  the  use  of  coal.  Its 
great  simplicitv  and  accessibilitv  for  cleaning  recommend  it  where 
feed  water  is  bad.  In  places  where  fuel  is  ^•ery  cheap,  especially 
where  it  is  a  waste  product,  as  at  sawmills,  the  plain  one  flue 
cvlindrical  boiler  is  frequentlv  used.  Boilers  of  this  type  may 
have  two  flues  or  modifications  of  these,  such  as  the  Lancashire 
and  Galloway  boilers. 

This  is  a  type  of  marine  boiler  which  is  sometimes  adapted 
for  service  on  land,  and  has  a  combination  of  two  or  more  flues, 
which  also  contain  the  combustion  chambers  and  fire  tubes. 

The  boilers  pre\'iouslv  mentioned  are  horizontal.  Vertical 
boilers,  such  as  the  Manning,  have  found  f a\ or  at  factories  where 
floor  space  is  valuable,  since  a  powerful  battery  of  boilers  may  be 
placed  in  a  small  fire  room.  Thev  h-d\c  a  cylindrical  shell  with 
a  fire-box  in  the  lower  end,  and  with  fire  tubes  running  from  the 
furnace  to  the  top  of  the  boiler.  This  type  of  boiler  also  offers  a 
large  super-heating  surface,  and  steam  under  high  pressure  is 
readilv  available. 

The  l)()ilers  thus  far  considered,  and  the  water  contained,  are 
hea\v  and  cumbersome,  and  the  shells  under  high  ]iressure  must 
be  made  \  erv  thick.  Boiler  scale,  which  consists  of  lime  and 
other  matter  deposited  from  the  water  on  the  boiler  shells  and 
around  the  tubes,  forms  a  dangerous  condition.  If  the  boiler  tails, 
either   throuuh    some   defect  or  throu<'h    carelessness  of   attendants. 


COMMON  FIRE  HAZARDS  73 


;i  disastrous  explosion  is  likely  to  take  place.  If  properly  designed 
and  made,  with  butt  and  strap  jointed  shells,  and  it"  cared  for  by 
competent  and  careful  attendants,  they  have  proved  safe,  reliable 
and  durable.  The  large  mass  of  hot  water  tends  to  keep  a  steady 
pi-essure,  though  at  the  expense  of  rapidity  of  raising  steam  or  of 
meeting  a  sudden  demand  for  more  steam.  This  should  be  taken 
into  consideration  when  laying  out  fire  protection  where  steam 
pumps  are  to  be  advised. 

A  large  number  of  water  tube  boilers  of  all  sorts  of  shapes  Water  Tube 
and  methods  of  construction  have  been  de^'ised  to  overcome  the  Boilers. 
admitted  defects  of  shell  boilers.  The  principal  types  to  be  fountl 
in  the  New  England  field  are  the  Babcock  and  Wilcox,  Heine  and 
Stirling.  Thev  all  have  the  larger  part  of  their  heating  surface 
made  up  of  tubes  of  moderate  size  filled  with  water.  They  all 
have  some  form  of  separators,  drum  or  resei'voir  in  which  the 
steam  is  separated  from  the  water ;  some  of  these  boilers  have  a 
shell  of  considerable  size,  thus  securing  a  store  of  hot  water  and 
a  good  free  water  surface  for  disengagement  of  steam.  Such 
shell,  drum  or  reservoir  is  either  kept  aw^a}-  frcjm  the  fire  or  is 
reached  onh  bv  gases  that  have  already  passed  over  the  surface  of 
water  tubes.  Tubes  are  of  moderate  diameter,  and  can  be  made 
abundantly  strong.  If  a  tube  does  fail  through  defect  in  manu- 
facture or  through  wasting  during  ser\  ice,  it  will  not  cause  a  true 
explosion.  Water  tube  boilers  may  be  made  light,  powerful  and 
compact,  are  well  adapted  for  use  with  forced  draft,  and  steam 
mav  be  raised  rapidly  from  cold  water. 

Most  boilers  are  heated  by  internally  fired  furnaces.  Under  Dutch  Ovens, 
certain  conditions  an  externally  fired  furnace  is  desirable.  An 
example  of  such  is  the  Dutch  oven  or  bulldog  furnace.  This  is 
simply  an  extension  built  in  front  of  the  boiler  into  which  the  fire 
oates  are  placed  instead  of  being  put  inside  of  the  boiler  wall 
proper,  and  underneath  the  front  end  of  the  boiler.  The  details 
of  construction  differ,  but  the  general  idea  is  the  same  in  all  cases. 
These  ovens  are  generallv  built  about  ten  feet  long  and  should  be 
fullv  as  wide,  and  can  very  well  he  wider  than  the  boiler  fi'ont 
itself.  These  ovens  are  frequently  found  in  wood-burning  locali- 
ties and  in  woodworking  plants  which  consume  large  amounts  of 
refuse.  All  kinds  of  culls,  sawdust,  bark,  etc.,  can  be  thrown  into 
it  without  much  effort,  making  them  a  labor  saver  and  the  most 
economical  furnace  for  this  purpose. 


74 


LECTURES  ON  FIRE  INSURANCE 


DUTCH- OVEN. 


Hazards  of 
Location. 


The  illustration  shows  the  sawdust  being  conveyed  direct  to 
the  furnace  through  the  blowpipe,  and  can  be  dropped  in  equally 
as  well  w  ith  a  chain  c()n\eyor.  There  should  be  an  extra  large 
opening  on  top  to  allow  the  fireman  to  shovel  or  scrape  the  larger 
refuse  into  the  furnace  from  the  floor  level.  The  blowpipe  or 
chain  com  evor  should  be  arranged  in  such  a  manner,  having  an 
extra  leg  or  side  extension  with  a  switch  or  damper  attached,  so 
that  when  no  fuel  is  wanted  directly  under  the  boiler,  it  can  be 
thrown  to  one  side.  Under  such  conditions  the  fuel  should  not  be 
piled  on  top  of  the  oven,  as  fuel  frequently  ignites  here.  It  is 
needless  to  sav  that  platforms  of  wood,  built  up  to  the  level  of  the 
o\en  floor,  should  be  protected.  This  is  frequently  a  rather  haz- 
ardous arrangement  and  carelesslv  operated.  The\-  do  not  ap]:)ear 
to  have  caused  many  fires,  ho^vever. 

Boilers  Ikuc  certain  hazards  of  location  and  installation  for 
which  a  number  of  rules  and  requirements  have  been  prescribed 
to  meet  varying  conditions.  In  general,  a  power  lM)iler  should 
preferably  be  located  in  a  detached  boiler  house  of  good  mill  or 
fire-resistive  construction.  If  adjacent  to  main  plant,  it  should  be 
well  cut  off  from  it.  If  located  within  a  main  building,  more  rigid 
requirements  for  installation  and  protection  of  rooms  are  pro\  ided. 
Also  in  either  case  boilers  should  be  preferably  located  a\\a\  from 
side  walls  of  roonis.  Combustible  ceilings  ()\er  Itoilers  should 
have  no  concealed  spaces,  and  should  be  ])rotecte(l  In  at  least  two 
good  coats  of  \\  hite\yash  or  fire-retardant  ])aint.  which  will  need 
to  be  renewed  as  occasion  demands.  This  means  that  wood  or 
metal   sheathing.  ])lastering,  etc..  should   be  remo\ed   and   the   ceil- 


COMMON  HRE  HAZARDS  75 


w^  left  unfinished  so  as  to  be  readily  accessible  for  inspection, 
whatever  protection  is  necessary,  aside  from  the  whitewash  or 
paint  mentioned  abo\e,  beinj^-  placed   upon  the  boiler. 

Between  the  unprotected  arch  or  breeching  (smokeflue)  of  Clearance, 
boiler  and  combustible  ceiling  or  material  should  be  not  less  than 
thirty-six  inches  ;  may  be  reduced  to  eighteen  inches  if  the  arch 
or  breeching  is  co\ere(l  witli  at  least  three  inches  of  asbestos 
cement,  or  its  ecjui\  alent  breeching  shoidd  be  covered  on  sides  as 
well  as  on  top  ;  and  may  be  reduced  to  ten  inches  in  one-story 
boiler  houses  if  the  arch  or  breeching  is  protected  with  three  inches 
of  asbestos  cement,  pro\ided  there  is  ample  \entilation  ()\er  the 
arch  or  breeching  to  the  outside  air.  The  dome  of  a  boiler  is 
simplv  a  large  steam  holder,  and  ma\-  hv  treated,  as  far  as  concerns 
clearance,  with  large  steam  pipes,  except  that  in  case  it  is  located 
between  joists  or  is  otherwise  pocketed,  it  should  ha\e  at  least  a 
three-inch  clearance  and  be  protected  with  two  inches  of  asbestos 
cement  having  smooth  finish.  Boilers  set  over  wooden  floors 
should  be  arranged  as  follows  :  On  the  floor  place  a  sheet  iron  or 
steel  ]Dlate,  not  less  than  three-sixteenths  inch  in  thickness,  extend- 
ing at  least  five  feet  in  front  of  and  two  feet  on  all  other  sides  of 
boiler  or  boilers,  plate  to  be  seciu'elv  riveted  at  joints  and  turned 
up  five  inches  at  edges  all  around  ;  on  top  of  the  plate  place  at 
least  fi\e  inches  of  brick  set  in  cement  mortar;  on  top  of  the  brick 
co\er  the  space  directly  imder  the  boiler  with  six-inch  hollow  fire- 
tile  covered  with  three-sixteenths  inch  steel  plate. 

Boilers  ha\'e  certain  hazards  of  use  beside  the  explosion  feature.  Hazards  of 
Combustible  material,  such  as  refuse  and  sweepings  in  the  boiler  Use. 
room,  is  a  common  cause  of  fire.  vSuch  material  if  not  biu'ned  at 
once  should  be  kept  in  a  fireproof  bin  or  \  aidt,  cut  off  from  the 
boiler  house.  This  is  mentioned  in  more  detail  under  Fuel.  The 
use  of  shavings  for  fuel  is  dangerous,  not  onlv  because  of  the  creep- 
ing of  fire  from  beneath  the  grate  bars  by  the  loose  shavings  aroimd 
the  doors,  but  because  of  the  danger  of  what  is  known  as  a  "  back 
draft,"  which  is  a  commcjn  cause  of  fire  in  planing  mills.  When 
the  draft  of  the  chimney  fails,  or  is  poor,  as  it  sometimes  is  in  damp 
weather,  the  entire  contents  of  the  fiu-nace  may  be  thrown  out  into 
the  sha\ings  vault  or  adjacent  room.  The  furnace  feed,  therefore, 
should  not  be  in  line  with  any  commimication  \vith  the  main  struc- 
tin^e,  but  at  right  angles  to  it,  so  that  in  case  of  a  back  draft  the 
burning  contents  of  the  furnaces  cannot  be  throw  n  into  the  other 
rooms   of  the   risk.      A  common  cause  of  fire  is  sparks  from  boiler 


76  LECTURES  ON  FIRE  INSURANCE 


stack.  Where  wood  is  used  for  fuel,  tlie  stack  should  be  pro\ided 
with  a  spark  arrester  or  proper  deflectcjrs  built  in  the  base  of  stack. 
Fires  occasionally  start  in  material  which  has  been  stored  in  some 
shed  or  box  adjacent  to  the  side  of  the  boiler.  Dust,  dirt  and  rub- 
bish should  not  be  allowed  to  collect  on  top  of  boilers.  Fires  from 
this  cause  are  not  frequent  but  possible,  as  experience  has  shown. 
Operating-  boilers  under  forced  draft  and  excess  load  for  the  work 
desi<;^ned  is  apt  to  be  a  dangerous  procedure. 
Boiler  An  economizer  is  an  arrangement  whereby  it  is  p(jssible  to  get 

Economizer.  i-,^.;j,^  from  the  products  of  combustion  by  passing  them  through  a 
feed  water  heater,  after  they  leave  the  boiler  and  before  thev  enter 
the  chimney.  The  economizer  most  commonly  foiuid  is  the  Green. 
It  is  matle  of  se\x'ral  sets  of  vertical  cast-iron  tidu'S  four  inches  in 
diameter,  placed  in  a  chamber  between  the  boiler  and  the  chimney. 
The  feed  water  is  pumped  in  succession  through  the  several  sets  of 
tubes,  beginning  at  the  more  remote,  and  finally  it  passes  from  the 
nearer  tubes  to  the  boiler.  This  arrangement  brings  the  hottest 
water  in  contact  with  the  hottest  gases.  There  are  scrapers  arranged 
in  sets,  one  on  each  tidie,  Bv  power  from  a  small  steam  engine  or 
elsewhere,  the  scrapers  are  continually  moved  up  and  down  on  the 
pipes  in  order  to  keep  the  pipes  free  from  soot  and  in  good  condi- 
tion to  take  up  heat.  Economizers  are  cleaned  bv  blowing  steam 
through  the  tubes  which  carries  out  the  soot.  Care  must  be  used 
in  the  disposal  of  this  soot.  It  is  heated  and  may  cause  fire  if  it 
conies  in  contact  with  inflanimalile  material. 
Smokestacks.  Mill    engineers   should  build  heavy  brick,    stone  or  concrete 

stacks  from  ground  to  a  point,  say  ten  feet,  above  peak  of  roof,  lin- 
ing same  with  fire  clay  brick  laid  in  fire  clay  mortar  where  breech- 
ing enters.  Breeching  shcndd  enter  stack  at  least  foin-  feet  below 
roof  of  boiler  house.  If  only  brick,  stone  or  concrete  base  is  used, 
lined  as  aboNe.  it  should  rise  at  least  fi\'e  feet  above  roof  of  boiler 
house,  and  metal  portion  of  stack  should  be  well  guyed,  and  painted 
^vith  asphaltum  every  year.  The  rules  allow  a  metal  stack 
outside  of  building  on  concrete  base.  Never  put  metal  stack  or 
breeching  through  roof  of  boiler  house.  Iron  stacks  are  liable  to 
rust  and  ):)ermit  sparks  to  escape  into  the  roofing  or  other  wood- 
work through  holes.  Under  ordinary  conditions,  there  is  little 
damage  to  be  expected  from  the  effect  of  heat  radiated  from  the 
iron  stack  upon  the  nearby  w'ood.  Stacks  shoidd  be  protected 
where  ]3assing  through  roofs  according  to  specifications  which 
appeared  in  the  October.  1911,  ^uartei-Iy  of  the  National  Fire 
Protection  Association. 


COMMON  FIRE  HAZARDS  77 


5.  FUEL  AND  ASHES 

The  storage  ami  handling  of  fuels  offer  a  fruitful  source  of 
trouhle.  The  most  prominent  hazardous  fuels  are  soft  coal,  char- 
coal and  oil  fuels,  and  these  will  be  mentioned  imder  separate  heads. 
Coke  offers  very  little  hazard,  although  cases  of  spontaneous  heat- 
ing in  coke  piles  ha\  e  been  noted. 

Tanneries,  where  bark  is  used,  frequently  burn  the  spent  tan 
under  the  boilers.  When  this  is  done,  the  feed  should  be  constant 
so  as  to  consume  the  spent  tan  as  fast  as  it  accumulates,  as  it  is 
liable  to  spontaneous  heating  and  ignition  if  stored  in  heaps  while 
moist. 

In  the  northern  and  wooded  sections  log  wood  is  frequently 
used  for  fuel  and  much  wood  is  consumed  in  the  homes.  In  wood- 
working plants  wood  refuse,  shaving  sawdust,  etc.,  are  used  in 
some  places  as  a  method  of  disposal,  and  in  others  as  their  only 
source  of  heat  energy.  These  plants  are  generally  equipped  with 
efficient  blower  systems  for  sucking  up  and  con\eving  the  material 
to  the  boiler  room  or  storage  \aults.  The  air  is  allowed  to  escape 
through  what  is  known  as  a  cyclone  separator,  the  material  drop- 
ping gently  into  its  proper  place  as  fed  directly  to  the  boilers. 
Sha\ings  vaults  are  frequently  within  the  boiler  room,  adjacent 
thereto,  or  in  nearby  sheds.  When  within  the  boiler  room  or  adja- 
cent thereto  they  should  consist  of  fireproof  or  cut-off  rooms  or 
vaults. 

The  use  of  liquid  fuel,  especially  of  crude  petroleum  oil,  gen- 
erally known  as  fuel  oil,  is  increasing.  The  problem  introduced  by 
this  means  is  principally  one  of  storage,  although  the  burners  should 
be  only  such  as  ha^•e  met  the  appro^•al  of  the  laboratory  examina- 
tions, and  installed  in  strict  conformity  to  rules  which  have  been 
provided.  The  methods  of  storage  are  a  cry  important  and  the  rules 
governing  the  storage  and  use  of  fuel  oil  shoukl  be  strictly  observed. 

There  is   no  question  that  bituminous  or  soft  coal  is  liable  to    Spontaneous 
oxidation  and  spontaneous  ignition  under  certain  conditions,  and  the    Heating 
following  suggestions  are  offered.  of  Coal  in 

Avoid  admission  of  air  to  interior  of  pile  through  interstices       o'^S** 
around  foreign  objects  such  as  timbers  or  irregular  brickwork,  also 
through  porous  bottoms   such   as  coarse  cinders.      Do    not  try   to 
\  entilate  by  pipes,  as  more  harm  than  good  is  often  done  in  this  way. 

The  amount  of  coal  contained  and  the  manner  in  which  it  is 
stored.      In  this  connection  it  is  advised  that  depth  of  the  pile  be 


78  LECTURES  ON  FIRE  INSURANCE 


Charcoal. 


not  o\'er  from  six  to  eight  feet,  depending  more  or  less  upon  the 
other  dimensions  of  the  pile,  I'he  height  from  which  the  coal  is 
unloaded  into  the  bin  also  plavs  an  important  part,  and  the  reduction 
of  this  distance  to  a  minimum  is  desirable  for  a  number  of  reasons. 
The  kind  of  coal  in  the  bin,  whether  slack,  run  of  mine,  or  lump, 
as  the  storage  of  run  of  mine,  dirty  coal  and  finely  divided  coal 
should  be  avoided  as  much  as  possible.  Coal  should  be  stored  in  a 
dry  state,  as  the  presence  of  wet  coal,  and  especiallv  wet  slack  coal, 
in  a  heap  is  particularly  undesirable.  This  condition  of  "wet 
storage  "  usually  exists  where  coal  has  been  treated  to  the  washing 
process. 

The  presence  of  any  source  of  heat  in  and  around  the  coal  bins, 
such  as  steam  pipes,  small  boilers,  and  other  features  of  like  nature, 
which  are  very  commonlv  found.  This  feature  is  worthy  of  par- 
ticular attention,  inasmuch  as  it  furnishes  an  initial  source  of  heat, 
and  as  some  initial  source  of  heat  is  necessary  before  the  phenome- 
non of  spontaneous  ignition  can  ensue,  the  ad\  antage  of  removing 
one  of  these  causes,  which  is  very  common  and  easily  controllable, 
is  very  apparent.  The  construction  of  the  bins.  (Where  possible 
bins  should  be  made  of  brick  or  stone.)  Structure  should  be  roofed 
over  and,  if  of  wood,  cracks  and  joints  in  the  wall  of  the  bin  should 
be  eliminated  as  far  as  possible  and  provisions  made  for  the  free 
circulation  of  air  around  the  sides  and  under  the  bin.  The  length 
of  time  that  must  elapse  before  any  action  of  a  dangerous  nature 
can  occur  depends  upon  such  a  widelv  varying  number  of  condi- 
tions and  circumstances  that  it  would  be  impossible  to  make  any 
statement  of  practical  \alue  which  would  co\  er  the  subject  e\  en  in 
a  general  way. 

An  alarm  svstem.  consisting  of  pipes  inserted  throughout  the 
coal  pile,  to  which  a  system  of  thermostats  with  suitable  annunciator 
has  been  connected,  has  been  suggested  for  protection  of  large  coal 
piles. 

The  storage  and  handling  of  charcoal  introduces  a  distinct 
hazard.  Just  as  a  sponge  absorbs  water,  so  the  innumerable  pores 
of  all  kinds  of  charcoal  possess  an  extraordinary  affinity  for  mois- 
ture, gases  and  vapors.  The  charcoal  is  said  to  occlude  gas,  and 
this  phenomenon  is  called  the  occlusion  of  gases  by  charcoal. 
This  phenomenon  is  accompanied  by  heat,  and  spontaneous  ig- 
nition is  liable  to  take  place. 

The  risk  of  this  phenomenon  occurring  is  the  greater  in 
proportion  as  the  charcoal    is  freshlv  made,  and  the  hotter  it  is  at 


COMMON  FIRE  HAZARDS  79 


the  time  of  its  exposure  to  the  air.  The  danger  disappears  in 
the  course  of  two  or  three  days;  if  the  charcoal  be  meanwhile 
kept  away  from  the  air,  and  only  exposed  thereto  when  thoroughly 
cool,  the  absorption  of  gas  proceeds  but  gradually.  This  pre- 
caution should  be  adopted  in  all  cases,  being  essential  to  safety. 
Old  charcoal  will  attain  the  same  danger  as  is  manifested  in  this 
respect  by  that  newly  prepared  if  it  be  heated  up  again,  the  heat 
expelling  the  occluded  gases  and  revivifying  the  absorptive  power. 

Moistening  charcoal  will  powerfully  stimulate  the  tendency 
of  charcoal  to  take  fire  spontaneously  after  re-drying.  In  this 
case  the  moisture  expels  the  occluded  gases  just  as  is  effected  by 
heating  to  incandescence.  So  long  as  the  liquid  occupies  the 
pores  the  charcoal  is  safe,  until  it  evaporates  on  drying  and  leaves 
the  pores  again  empty. 

Fats  and  oils  also  play  a  dangerous  part  in  charcoal,  the 
pores  of  which  extend  these  substances  over  a  large  superficial 
area,  in  the  same  way  as  is  done  by  fibrous  materials.  Greasy 
charcoal  may  easily  ignite  of  its  own  accord.  Solid  substances 
which,  although  apparently  dry,  give  off  moisture  and  also 
liberate  oxygen  when  gently  heated,  are  just  as  dangerous  to 
charcoal  as  are  moisture  and  gases  (oxygen  in  particular).  Char- 
coal should  not  be  stored  or  placed  in  contact  with  hygroscopic 
substances  (calcium  chloride,  magnesium  chloride),  which  by 
their  attraction  for  water  and  moisture  may  saturate  the  charcoal 
with  water;  the  same  applies  to  metallic  sulphides  with  an  affinity 
for  oxygen,  and  to  ozone,  liquid  oxygen,  oil  of  turpentine,  and 
all  substances  that  readily  part  with  oxygen. 

New  parcels  of  powdered  or  coarse  charcoal  should  be 
handled  with  suspicion,  since  from  some  unknown  cause  (fresh- 
ness, recalcination,  drying  or  moisture)  they  may  contain  the 
germ  of  a  spontaneous  outbreak  of  fire,  still  undetectible.  Dur- 
ing the  first  three  days  after  arrival  the  goods  must  be  stored  in  a 
careful  manner,  or  else  the  internal  temperature  of  the  mass  be 
controlled  by  frequent  readings,  since  it  is  only  after  this  time 
has  elapsed  that  one  can  tell  whether  the  tendency  to  spontaneous 
ignition  really  exists  or  not.  These  precautions  are  particularly 
necessary  when  the  charcoal  is  tightly  packed. 

These    are    old    offenders.       An    ordinance    of    the    city    of   Ashes  and 
London,   which  was    passed     in    1667,  contained    the    following:    Cinders. 
"That    every    inhabitant    prepare    some    secure    place     in    their 
dwelling  (not   under   or   near    any    staircase)  to    lay    in   their   sea 


80  LECTURES  ON  FIRE  INSURANCE 


coal  ashes,  embers,  or  any  other  sort  of  fire  ashes ;  and  that  the 
said  ashes  be  quenched  with  water  every  night  before  going  to 
bed."  Ashes  should  always  be  kept  in  approved  metal  ash  cans, 
or  may  be  placed  on  an  incombustible  floor,  provided  there  be  no 
storage  of  combustible  stock  nearby,  but  must  in  no  case  be  al- 
lowed, even  temporarily,  to  be  dumped  on  a  wooden  floor,  or 
against  combustible  walls,  partitions,  posts,  etc.,  or  stored  in 
wooden  receptacles.  It  is  recommended  that  cans  used  for  dump- 
ing ashes  into  wagons,  and  consequently  subjected  to  severe  service, 
be  constructed  in  a  very  substantial  manner.  In  a  recently  built 
large  power  plant,  ashes  are  removed  by  a  vacuum  conveyor  sys- 
tem which  discharges  into  an  ash  bunker  built  above  the  boilers. 
From  the  bunker  the  ashes  are  chuted  to  cars  and  taken  away. 
The  same  vacuum  system  is  used  for  removing  soot  from  the 
economizers. 

6.  RUBBISH 

(or  Sweepings) 

Good  housekeeping  is  the  best  preventive  of  fire.  Factories 
should  be  swept  daily  and  the  refuse  at  once  removed  and  burned 
or  temporarily  stored  in  fireproof  vault  outside  Waste  or  refuse 
chutes,  while  convenient,  are  frequent  causes  of  fire  and  are  liable 
to  cause  trouble,  no  matter  how  well  constructed.  The  refuse 
should  be  placed  in  standard  metal  barrels  and  removed  at  once  to 
the  boiler  room  and  burned;  never  left  in  the  factory  over  night. 
The  large  proportion  of  fires  due  to  refuse  and  sweepings  shows 
the  importance  of  this  hazard.  This  condition  is  equally  true 
in  dwellings,  mercantile  property,  schools,  churches,  etc. 
Corners  are  the  places  that  should  be  examined.  Corners,  dark 
places,  under  stairs,  closets,  etc.  Where  windows  are  below  the 
level  of  sidewalks,  areas  being  constructed  for  the  admission 
of  light,  the  owners  of  buildings  are  seldom  careful  to  prevent 
the  accumulation  in  such  places  of  dried  leaves,  straw,  or  other 
combustible  material,  where  a  falling  cigar  or  spark  from  a 
neighboring  fire  might  ignite  them. 

1.  OILY  MATERIAL 

Oily  Waste.  Numerous   fires  occur  from  the  spontaneous    ignition    of   oily 

waste,  oily  clothing,  finishing  rags,  etc.,  and  it  is  evident  that 
such  materials  should  not  be  allowed  to  collect  in  out  of  the  way 


COMMON   FIRE    HAZARDS  81 

places.  A  sufficient  number  of  standard  waste  cans  should  be 
provided,  and  all  oily  waste  should  be  placed  in  these  cans  during 
the  day  and  removed  from  the  building  at  night  without  fail. 
If  preferred,  standard  cans  may  be  hung  from  posts,  provided  they 
are  arranged  to  be  readily  removed  and  to  maintain  a  four-inch 
clearance  to  wooden  posts.  When  waste  is  past  its  usefulness  it 
should  be  burned  and  care  should  be  used  to  keep  it  separate 
from  sweepings  or  other  refuse,  owing  to  the  extra  hazard. 

Sawdust  is  a  dangerous  incendiary,  often  used  as  a  dampener   Sawdust, 
on  marble    floors,   used   to    fill    cuspidors,  etc.      The    least   bit    of 
grease,  oily   rags    and   the    like,  will    bring  on  a  rapid    oxidation 
which  will  eventually  cause  spontaneous  ignition  of  the  sawdust. 

Workmen's  clothes  should,  where  standard  vaults  are  un-  Workmen's 
available,  preferably  be  hung  in  the  open,  away  from  inflam-  Clothes, 
mable  material  and  where  the  air  will  circulate  freely  about  them. 
In  oil  or  grease  risks  they  must  not  be  allowed  in  wooden  closets, 
and  if  placed  in  iron  closets,  the  latter  should  be  of  ventilated 
construction  to  allow  of  air  circulation  and  ready  inspection. 
Never  allow  oily  waste  to  be  put    in  these  closets. 

Floor  oils,  with  greater  or  less  percentage  of  vegetable  oil  in  Floor  Oils 
the  mixture,  are  being  used  very  extensively  in  dwellings,  halls,  etc. 
schools,  etc.  Mops,  brushes  and  cloths  used  in  applying  these 
should  be  hung  up  free  from  contact  with  any  wood,  or  else  they 
should  be  kept  outside  the  building  or  in  a  fireproof  vault  inside 
the  building.  There  are  floor  brushes  which  offer  an  element 
of  danger,  such  as  reservoir  brushes,  designed  to  use  kerosene  for 
laying  dust  when  sweeping  floors.  There  is  also  danger  of  gas- 
olene being  substituted. 

Sweepings  mixtures,  sold  under  various  trade  names,  used  Sweeping 
for  laying  dust,  vary  considerably  in  respect  to  fire  hazard.  Lin-  Compounds, 
seed  and  other  vegetable  oils  capable  of  producing  spontaneous 
heating  have  been  found  in  some  of  these  preparations.  Gasolene 
and  kerosene  have  also  been  found  in  these  preparations.  The 
comparative  hazards  of  most  of  these  compounds  can  be  found 
by  consulting  the  list  of  "Gas,  Oil  and  Chemical  Appliances." 

Dustless  mops  and  dust  cloths,  made  of  fine  cotton  saturated 
with  oil,  offer  a  serious  hazard.  Some  manufacturers  seem  to 
recognize  this  and  offer  silk  cloths  and  especially  prepared  non- 
hazardous  cloth,  which  should  be  looked  upon  with  serious 
skepticism. 


82  LECTURES  ON  FIRE  INSURANCE 

8.  USE  AND  STORAGE   OF    INFLAMMABLES,  VOLA- 
TILES,  AND  EXPLOSIVES 

The  use  or  storage  of  fluids  giving  off  inflammable  vapors 
at  ordinary  temperatures  even  with  all  known  precautions  is  a 
danger  which  should  always  be  recognized.  Systems  which  pro- 
vide for  storing  and  handling  gasolene,  naphtha,  benzine  and 
similar  fluids,  outside  of  and  so  removed  from  adjoining  property 
as  not  to  create  an  exposure  thereto,  are  considered  from  an 
insurance  viewpoint  as  the  least  dangerous.  The  rules  and 
requirements  governing  the  methods  of  storage  and  handling 
should  be  carefully  observed.  Particular  attention  is  called  to 
the  rule  requiring  storage  tanks  used  with  inside  discharge  sys- 
tems to  be  installed  outside  of  and  removed  a  proper  distance 
from  the  building. 

The  characteristics  of  gasolene  have  been  previously  men- 
tioned, but  the  average  man  and  woman  still  need  to  be  suitably 
warned  of  its  dangers  when  used  for  simple  domestic  purposes. 
Gloves  must  be  cleaned,  fabrics  must  be  dipped  in  alcohol  and 
their  use  will  continue.  For  that  reason,  it  is  vitally  important 
that  the  user  should  have  all  the  information  possible  about  the 
danger  incurred.  Gasolene  should  be  used  in  open  air  wherever 
possible,  but  if  it  must  be  used  in  the  house,  all  the  windows 
should  be  opened  wide  and  a  suflicient  draft  created  to  drive  all 
the  vapor  from  the  room.  It  is  almost  criminal  to  use  gasolene 
in  the  kitchen  or  other  rooms  where  it  is  exposed  to  fire.  The 
vapor  has  been  known  to  jump  thirty  feet  from  a  tank  in  the  open 
air  and  explode  with  such  violence  as  to  wreck  the  tank  car  and 
burn  all  the  buildings  in  the  immediate  neighborhood.  It  is  not 
necessary  to  touch  a  match  to  it.  A  spark  from  the  heel  of  a 
shoe  striking  a  tack  or  nail  will  explode  the  vapor.  A  lighted 
gas  jet  will  produce  the  same  result.  Keep  gasolene  away  from 
every  kind  of  flame,  even  if  that  flame  is  enclosed  as  in  a  stove  or 
furnace.  Articles  dipped,  washed  or  soaked  in  gasolene  give  off 
an  explosive  vapor  for  hours  after.  They  should  be  thoroughly 
aired  before  being  used  and  always  kept  away  from  exposed 
flame. 

Several  metal  and  stove  polishes  on  the  market  contain  quan- 
tities of  benzine  and  other  inflammables,  and  should  be  carefully 
investigated  and  only  those  allowed  that  can  reasonably  be 
called  safe. 


COMMON  FIRE  HAZARDS  83 


Explosives  are  subject  to  local  ordinances  in  any  city  or  town 
that  has  any  regard  to  its  civic  welfare. 

9.  SMOKING 

Very  little  need  be  said  concerning  this  very  common, 
perfectly  well  recognized,  and  most  prevalent  cause  of  fire.  In 
factories  using  much  inflammable  stock,  workmen  should  be  com- 
pelled to  use  safety  matches  only,  to  be  supplied  by  the  manage- 
ment if  necessary  to  secure  enforcement  of  this  rule.  Workmen 
should  be  instructed  to  take  care  of  their  pipes,  and  coats  should 
not  be  left  about.  There  is  no  objection  to  allowing  smoking  in 
boiler  rooms  during  the  noon  hour;  and  in  large  works,  or  stores 
employing  many  men,  special  smoking  rooms  might  be  safely 
and  advantageously  arranged.  The  New  York  Bureau  of  Fire 
Prevention  has  recently  posted  the  following  signs  in  buildings 
where  the  conditions  make  careless  smoking  and  use  of  matches 
an  eminent  hazard:  "Smoking  prohibited  in  these  premises  under 
penalty  of  fine  or  imprisonment  or  both."  No  rules  will  elimi- 
nate the  careless  disposal  of  smokers'  matches,  glowing  butts, 
etc.  We  can  each  be  a  self-appointed  emissary  for  the  purpose 
of  reforming  some  well  known  careless  smoker.  Cigarette 
smoking  should  be  prohibited  under  all  conditions  wuthin  the 
premises  of  shops,  department  stores,  etc.  Numerous  fires  are 
caused  by  cigars  and  cigarettes  falling  upon  window  awnings. 
It  is  recommended  that  all  such  awnings  be  fireproofed,  just  as 
scenery  in  the  theatre  is  fireproofed. 

10.  MATCHES 

The  "strike  anywhere"  match  has  no  legitimate  place  in 
the  home,  and  the  husband  and  father  who  loves  his  family  will 
exclude  it  from  his  house  as  he  would  a  pestilence.  But  almost 
the  same  arguments  may  be  brought  against  its  use  in  the  store  or 
factory.  It  is  everywhere  a  menace,  and  the  argument  that  it  is 
convenient  is  the  barrier  behind  which  its  advocates  seem  to  take 
shelter.  In  two  states,  Massachusetts  and  North  Carolina,  the 
legislatures  have  been  asked  to  pass  bills  prohibiting  the  sale  of 
any  match  igniting  on  other  than  prepared  surfaces.  The  argu- 
ment for  convenience  was  the  one  chosen  by  the  opponents  of  the 
measures  in  both  states.      At   the   hearings  on    the  bill    in  Massa- 


84  LECTURES  ON  FIRE  INSURANCE 

chusetts  the  representative  of  one  of  the  match  manufacturers 
pleaded  with  tears  in  his  voice  that  the  committee  should  not 
inflict  so  cruel  a  hardship  upon  society.  He  painted,  v^^ith  deep 
emotion,  the  picture  of  a  gentleman  in  evening  dress  with  the 
curve  of  his  waist  line  irretrievably  ruined  by  the  projection  of  a 
box  of  safety  matches  in  his  hip  pocket. 

Safety  matches  can  now  be  procured  so  cheaply  that  the  old 
excuse  of  greater  cost  no  longer  applies.  A  dozen  boxes,  con- 
taining seventy  matches  in  each,  can  now  be  obtained  for  the 
small  sum  of  five  cents,  and    larger  quantities  at  reduced  prices. 

n,  LOCOMOTIVE  SPARKS 

This  is  a  well  recognized  hazard.  Four  Mutual  Companies 
specializing  in  flour  mills  and  elevators,  paid  over  $160,000  in 
1910  for  locomotive  spark  losses.  The  Cotton  Insurance  Asso- 
ciation, Atlanta,  Ga.,  reports  that  ninety  per  cent  of  cotton  fires 
in  transportation  are  due  to  locomotive  sparks,  and  the  loss  of 
two  compresses  alone  by  this  cause  amounted  to  $1,350,000. 
The  enormous  destruction  by  forest  fires  caused  by  locomotive 
sparks  is  a  vital  problem. 

Exhaustive  tests  on  locomotives  have  proved  that  nine  per 
cent  of  the  available  source  of  heat  energy  was  lost  through  uncon- 
sumed  fuel  in  the  form  of  cinders  or  sparks  passed  out  of  the 
stack.  Carefully  prepared  figures  show  this  to  be  an  equivalent 
of  twenty  million  dollars  or  more  to-day.  From  the  results  of 
tests  made  it  was  concluded  that  this  fuel  loss  in  the  form  of 
cinders  collecting  in  the  front  end  and  passing  out  of  the  stack, 
admittedly  very  large,  may  readily  be  reduced.  The  results  there 
recorded  were  obtained  with  a  boiler  having  a  narrow  fire  box; 
the  losses  in  the  form  of  cinders  would  probably  be  smaller  with 
a  wide  fire  box.  A  sure  road  to  improvement  in  this  direction 
lies  in  the  direction  of  increased  grate  area.  Opportunities  for 
incidental  savings  are  to  be  found  in  improved  flame  ways,  such 
as  may  be  procured  by  the  application  of  brick  arches  or  other 
devices.  Such  losses  may  also  be  reduced  by  greater  care  in  the 
selection  of  fuel  and  in  the  preparation  of  the  fuel  for  the  service 
in  which  it  is  used.  The  thought  is  advanced  that  it  is  not  un- 
reasonable to  expect  that  the  entire  loss  covered  by  that  item  will 
in  time  be  overcome. 

It  is  singular  that  the  railroads  of  the  country  do  not  consider 


COMMON  FIRE  HAZARDS  85 


the  economic  waste  that  is  annually  caused  by  this  great  inefficiency 
of  combustion.  Self-interest  should  induce  them  to  overcome 
it,  even  if  not  actuated  by  a  consciousness  of  the  duty  they  owe 
the  public  in  making  an  effort  to  reduce  the  tremendous  fire  loss 
which  is  a  direct  result  of  this  inefficiency.  Judging  from  past 
history,  the  trouble  will  not  be  recognized  or  corrected  by  the 
railroads  until  public  attention  is  given  to  the  problem.  The  fire 
marshals  or  railroad  commissions  should  be  authorized  to  place 
where  it  properly  belongs  the  financial  responsibility  for  fire 
losses  occasioned  by  railroad  negligence  or  operation. 

12.  LIGHTNING 

Just  how  much  damage  is  caused  by  lightning  in  the  state 
is  difficult  to  determine.  It  is  claimed  that  more  lives  are  lost 
by  lightning  than  by  violent  winds  and  tornadoes.  The  United 
States  Weather  Bureau  in  1890  started  a  statistical  inquiry  and 
kept  a  record  for  ten  years,  after  which  the  work  was  abandoned 
on  account  of  not  being  successful  in  gathering  complete 
information.  However,  during  the  year  of  1900  alone  their  in- 
complete reports  showed  that  71o  persons  were  killed  by  lightning 
or  injured  fatally,  besides  thousands  of  dollars'  worth  of  property 
destroyed  annually  by  this  dreaded  element. 

A  lightning  stroke  travels  at  a  speed  of  186,000  miles  per  Great  Power 
second.  It  is  estimated  that  a  stroke  of  lightning  one  mile  long  of  Lightning, 
represents  500  million  volts.  This  energy,  if  bottled  up  in  a 
storage  battery,  would  drive  all  of  the  electric  street  cars  of  a 
metropolis  for  several  hours  or  light  a  13  power  incandescent 
lamp  for  twenty  years.  It  is  this  electrical  energy  of  lightning 
that  kills,  and  detaches  blocks  of  masonry,  and  causes  buildings 
to  burn.  As  we  have  this  force  to  contend  with,  being  the  result 
of  abnormal  electrical  conditions,  which  scientists  claim  may  be 
prevented  by  aiding  nature's  laws  and  which  experience  seems 
to  show  proves  that  a  very  small  amount  of  loss  has  ever  hap- 
pened to  buildings  with  lightning  rods  on  them.  Where  any 
such  losses  have  occurred  investigation  proves  the  buildings  to  be 
rodded  by  the  old  style  lightning  rod,  and  poorly  grounded  and 
out  of  condition. 

This  appears  to  be  positive  proof   of  the  protection  afforded   Value  of 
by   pure   copper   cable   lightning  rod   as  manufactured  to-day  by  Lightning 
legitimate   lightning   rod    manufacturers    and    installed    by    their   Rods. 


86 


LECTURES  ON  HRE  INSURANCE 


local  representatives,  who  have  been  instructed  in  the  importance 
of  properly  erecting  lightning  protection.  It  is  equally  as  im- 
portant that  lightning  rods  be  installed  according  to  scientific 
principles  as  that  a  good  lightning  rod  be  employed  in  this  work. 

Lightning  rods  are  not  placed  on  buildings  for  the  purpose 
of  inviting  a  lightning  stroke,  as  was  at  one  time  thought  to  be 
their  purpose.  A  building  made  of  wood,  brick,  or  stone  serves 
as  a  condenser  or  storehouse,  in  which  electrical  energy  will 
collect — such  buildings  are  in  direct  opposition  to  nature's  laws; 
as  during  a  thunder  storm  electrical  energy  fuses  or  wastes  away 
from  all  vegetation  such  as  trees,  growing  crops,  etc.,  caused  by 
the  attraction  of  the  electricity  of  the  atmosphere  and  clouds. 
This  same  attraction  induces  electricity  into  a  building  from  the 
earth  and  in  accordance  with  nature's  laws.  Lightning  rods  in- 
stalled on  a  building  allow  this  continuous  fusing  or  wasting 
away  of  electrical  energy,  thus  relieving  the  electrical  stress  be- 
tween the  cloud  and  earth  or  building  which  when  broken  down 
allows  the  lightning  stroke.  Hence  the  necessity  for  sharp  points 
on  the  ends  of  the  rods,  close  contact  with  the  building  and  all 
metal  parts  thereon,  and  well  grounded  terminations  of  the  rods. 
If  a  rupture  does  occur  in  the  air  between  earth  and  cloud,  the 
lightning  then  passes  downward  safely  to  earth  through  the  rods. 
The  suggestions  of  the  National  Board  of  Fire  Underwriters  for 
Protection  Against  Lightning,  as  recommended  bv  the  National 
Fire  Protection  Association,  should  receive  careful  consideration. 

More  and  more  the  reliable  scientifically  constructed  and 
installed  lightning  rod  is  coming  into  its  own.  It  is  being  recog- 
nized to  a  greater  extent  all  the  time  by  insurance  companies,  and 
here  and  there  credits  are  being  allowed  on  rates.  The  Flour 
Mill  Mutuals,  which  have  been  allowing  a  reduction  for  rods  on 
elevators  and  mills,  are  considering  the  question  of  increasing 
this  credit.  Their  experience  on  rodded  property  warranted  the 
original  credit,  and  this  experience  has  even  improved  since  then. 


13.  INCENDIARISM 

"Incendiarism"  and   "Arson"  are  often  used  synonymously. 

One  who  burns  anything  of  value  is  an  incendiary ;    whereas   to 

commit  arson  is  to  burn  or  attempt  to  burn  the  property  of  another. 

Burning  to  Burning  to  defraud  an  insurance  company  occurs  only  when  an 

Defraud  the    agent  has  given  insurance  for  an  amount  in  excess  of  the  \  alue  of 

Insurer.  {\iq  property,  except   in  very  rare  cases  in  which  goods  are  insureil 


COMMON  FIRE  HAZARDS  87 


and  removed  secretly  before  the  fire  is  started.  The  meanest  man 
on  earth  is  he  who  burns  a  building  to  get  money  which  his  neigh- 
bors have  paid,  or  contracted  to  pay,  in  premiums  or  assessments 
to  an  insurance  company.      He  not  only  robs  others  of  money  they  ' 

have  paid  for  protection  against  loss  by  fire,  but  by  burning  his 
own  he  jeopardizes  the  buildings  and  lives  of  others.  He  is  worse 
than  a  highwayman,  for  he  destroys  wealth,  while  the  highwayman 
only  transfers  it  so  it  is  not  lost  to  the  state.  Burning  a  building 
changes  products  of  human  effort  to  useless  debris. 

In  the  group  of  those  who  are  incendiaries  on  account  of  Malice  or 
malice  or  revenge  are  placed  those  who  burn  because  of  envy  or  Revenge. 
jealousy. 

Pyromania  (fire  madness)  is  a  symptom  rather  than  a  distinct  The  Pyro- 
form  of  insanity,  but  in  many  of  the  cases  in  which  it  occurs  it  is  maniac, 
the  first  evidence  of  mental  derangement.  It  is  difficult  to  convict 
such  a  person,  because  no  motive  for  the  act  of  burning  can  be 
shown,  and  he  may  exhibit  no  other  symptoms  which  suggest  a 
malady  of  the  mind.  Later  other  marked  symptoms  of  mania  de- 
velop, making  the  disease  unmistakalile,  but  in  the  interval  he  may 
set  a  number  of  fires.  However,  he  oftener  than  any  other  incen- 
diary is  seen  while  committing  the  act,  for  he  has  at  the  time  no 
fear  of  punishment.  The  pyromaniac  is  seized  by  an  imperative 
desire  to  burn.  While  under  this  irresistilile  impulse  he  has  no 
appreciation  of  the  fact  that  his  act  will  injure  others  and  may  result 
in  punishment  to  himself.  This  propensity  of  the  insane  is  most 
likelv  to  develop  in  the  incurable  classes  of  the  insane,  and  in  the 
imbecile,  and  sometimes  is  seen  in  those  suffering  from  epilepsy  and 
paresis.  There  never  comes  a  time  when  it  is  safe  to  society  for 
one  who  has  once  had  an  irresistible  impulse  to  incendiarism  to  be  at 
large. 

The  increase  in  the  number  of  this  class  of  burners  in  propor- 
tion to  population  has  been  and  will  be  greater  each  year,  because 
the  increase  of  the  insane  population  is  proportionately  greater  than 
that  of  the  sane.  The  man  who  burns  for  revenge  is  always  one 
who  thinks  he  has  been  deeply  wronged,  while  the  burner  to 
defraud  has  no  excuse  but  greed.  One  who  burns  to  get  insurance 
money,  if  he  is  not  apprehended,  invariably  buys  and  burns  again. 
The  one  who  burns  to  "  get  even  "  finds  that  he  who  "  gets  even  " 
gets  nothing  else,  and  he  rarely  is  tempted  again  to  commit  that 
crime.  Mischievous  boys,  who  start  fires  without  realizing  the 
consequences  likely  to  follow,  usually  are  reformed  by  an  admoni- 


88  LECTURES  ON  FIRE  INSURANCE 


tion  from  the  juvenile  court.  The  pyromaiiiac  has  a  desire  to  burn 
which  is  irresistible,  and  therefore  sinless,  liut  society  must  be  pro- 
tected by  depriving  him  of  liberty. 


J4.  SEASONAL  HAZARDS 

Winter.  Thawing  out  frozen  water  pipes.  Heating  appara- 
tus forced  to  the  point  of  danger. 

Stitmner.     Burning  of  brush,  grass  and  rubbish. 

Spring'.  House  cleaning  and  repairing  endeavors  frequently 
lead  to  carelessness  and  conditions  that  cause  fires. 

Pall.  Neglect  to  inspect  stove  pipes,  flues  and  heating  appara- 
tus for  defects  due  to  rust  and  idleness  cause  fires  when  the  first 
cold  spell  arrives  and  heaters  are  started. 

Fourth  of  July  and  Cliristmas.  The  cause  of  the  horrors 
that  have  attended  these  festive  occasions  are  too  well  known  to  be 
described  in  this  pamphlet.  Everyone  should  supply  himself  with 
a  large  number  of  the  bulletins  issued  by  the  National  Fire  Protec- 
tion Association  preceding  each  of  these  holidays,  and  supply  the 
local  papers,  societies,  churches,  etc.,  where  such  warnings  may 
become  effective. 


15.  MISCELLANEOUS 

Endemc  ^^  ^^^  been  said  that  we  lead  the  world  as  the  most  careless 

Carelessness,  people  on  earth,  and  until  public  opinion  is  educated  up  to  a  point 
where  it  will  rise  in  its  might  and  demand  that  each  be  careful, 
especially  where  carelessness  may  result  in  loss  to  others,  we  shall 
continue  to  lead  the  world  in  the  lives  lost  and  property  destroyed 
by  easily  preventable  causes.  I  use  the  medical  term  "endemic," 
as  applied  to  carelessness,  for  it  so  well  describes  the  present  condi- 
tion of  the  American  people.  An  endemic  disease  is  one  which  is 
constantly  present  to  a  greater  or  less  degree  in  any  place,  as  dis- 
tinguished from  an  epidemic  disease  which  prevails  widely  at  some 
one  time,  or  periodically,  and  from  a  sporadic  disease  of  which  a 
few  instances  occur  now  and  then.  As  Cleveland  said,  "  This  is  a 
condition  and  not  a  theory,"  and  after  the  finest  schedules  have  been 
perfected,  "  tried  on  the  dog,"  as  Mr.  Cabot  expressed  it,  and  found 
reasonably  adaptable,  we  still  must  add  on  something  for  good 
measure  to  take  care  of  this  American  disease,  endemic  carelessness. 


COMMON  FIRE  HAZARDS  ,  89 

This  is  often  the  means  of  producing  fire.  It  is  directly  so  Use  of  Water, 
in  the  case  of  fire  produced  by  quicklime.  It  is  a  necessary  ad- 
junct to  spontaneous  ignition  of  charcoal,  fibrous  substances,  etc. 
In  the  storage  of  calcium  carbide,  water  is  its  only  danger. 
Other  chemicals  will  react  in  a  similar  manner,  conspicuous 
among  which  is  sodium  peroxide,  a  bleaching  agent.  Hydrogen 
peroxide  is  given  off  when  water  is  added.  Where  there  is 
chemical  action  there  will  be  heat,  hence  the  danger  here. 
Edward  Atkinson,  in  his  most  interesting  reminiscence  entitled 
* 'Prevention  of  Loss  by  Fire,"  cites  the  following:  "One  of  our 
largest  losses  was  traced  to  the  misuse  of  a  bucket  of  water,  which 
I  cite  as  an  example  of  the  spread  of  explosive  gases.  The 
watchman  had  dropped  his  lantern  in  the  early  morning  into  the 
slush  box  of  the  main  gears  at  the  head  of  the  wheel  pit,  which 
being  filled  with  lint  had  taken  fire  at  a  level  with  an  unoccupied 
basement  floor.  The  grease  and  lint  burned  with  a  very  small 
flame  and  dense  smoke.  The  watchman  threw  a  bucket  of  water 
upon  the  burning  mass,  which  instantly  blazed  up,  carrying  the 
flame  up  through  the  belt  holes  into  the  room  above,  leading  to 
the  total  destruction  of  the  factory.  Upon  asking  an  explanation 
of  this  incident  from  President  William  B.  Rogers,  he  stated  that 
the  burning  grease  and  lint  yielded  hot  gases,  which  not  being 
.supplied  with  sufficient  oxygen  at  their  source  these  gases  spread 
in  the  form  of  black  smoke  without  ignition.  The  throwing  in 
of  the  bucket  of  water  upon  the  smouldering  mass  produced 
steam,  which  has  a  great  conveying  quality  in  regard  to  other 
gases.  This  steam  diffused  the  hot  combustible  gases,  then 
yielding,  gave  place  for  a  sufficient  supply  of  oxygen,  causing 
what  was  virtually  an  explosion." 

Working     over     hours    produces    fires,    through    the    sleepy   -m-    <■ 
indifference  of  tired  workmen.      Fires   have   been    discovered   by   Over  Hours, 
persons  of   a  building  burning  briskly  in  the  upper  stories,  while 
the  workmen  below  knew  nothing  of   it. 

The  use  of  cloth  advertising  signs  in  front  of  stores,  vacant  q  th  S' 
buildings  and  billboards  is  a  decided  fire  hazard,  and  a  menace 
to  life  and  property.  All  such  should  be  removed  wherever  they 
are  in  use.  Every  sincere  fire  prevention  disciple  should  do  all 
in  his  power  to  eradicate  the  use  of  this  method  of  advertising 
in  his  city. 

Aisles  of   ample  width   should   be  maintained   to   stairs,  ele-   Care  and 
vators,  fire  escapes,  firewall   openings   and   between  stock   piles.  Maintenance. 


90  -  LECTURES  ON  FIRE  INSURANCE 


Broken  windows  should  be  repaired  immediately.  Broken  plas- 
tering, holes  in  floors,  partitions,  etc.,  allow  fire  to  reach  con- 
cealed spaces  where  it  is  hard  to  extinguish  and  should  be 
repaired  without  delay.  Stock  should  be  kept  at  least  eighteen 
inches  below  ceilings  (and  also  under  deck  floors)  to  allow  hose 
streams  to  be  used  effectively  and  also  to  permit  of  the  spreading 
of  tarpaulins.  Should  be  placed  on  skids  raising  it  at  least  four 
inches  above  the  floor  to  minimize  loss  by  water.  Should  be 
piled  so  as  not  to  interfere  with  the  operation  of  fire  dooi's ;  when 
necessary,  guards  will  be  required. 
Fumigation.  The  burning  of  sulphur,  or  exposing   fumes   of  the   volatile 

carbon   bisulphide,  which    are   highly  explosive   in  mixture  with 
air,  are   distinct   hazards.      Various  kinds  of  dips  and  washes  for 
this  purpose  have  benzine  as  a  component  part. 
Hazard  of  Frequently  fires  occur  in  premises  in  which  fires  have  already 

Previous         broken  out   and   caused    more  or   less    damage,  after   the  original 
Fires.  flre   is  presumably  extinguished,  due   to  smouldering  embers,  fly- 

ing sparks,  etc.,  being  rekindled.  Insufficient  attention  to  ex- 
tinguishment, a  change  or  rise  of  wind,  and  lack  of  proper  watch- 
fulness and  safeguards  thereafter  are  the  prominent  factors  which 
influence  the  starting  of  second  fires.  Fires  frequently  caused  by 
electrical  fixtures  and  wiring  that  have  been  deranged  or  damaged 
by  previous  fires  in  the  same  buildings.  After  every  partial  loss 
in  a  building  in  which  electricity  is  used  for  light,  heat  or  power, 
all  wiring  and  controlling  devices  should  be  carefully  inspected 
by  a  competent  person  before  the  equipment  is  used  again. 


COMMON  FIRE  HAZARDS  91 


QUESTIONS 

1.  Define  Common  Hazards. 

2.  Enumei^ate  ten  principal  classes  of  Common  Hazards. 

3.  State  the  principal  hazards  of  gas  lighting. 

4.  Give     the     principal     precautions     for    guarding    against 
hazards  of  gas  lighting. 

5.  Under     what      conditions     do    kerosene     lamps     become 
hazardous.'' 

6.  What  rules  should   be  observed   in  the  use  of  kerosene  oil 
lamps  ? 

7.  Enumerate  some  of  the  most  important  features  governing 
the  installation  of  kerosene  oil  pressure  lighting  systems. 

8.  How    are    fires    from    electric    lighting  systems  commonly 
caused  ? 

9.  How  is  acetylene  gas  made? 

10.  Give  the  properties  of  acetylene  gas. 

11.  State  the  rules  for  storage  of  calcium  carbide. 

12.  Give  a  brief  description  of  the  fundamental  principle  of 
an  approved  acetylene  gas  generator. 

13.  How  is  acetylene  under  pressure  rendered  safe? 

14.  Under  what  conditions  may  liquefied  acetylene  be  used? 

15.  Describe  briefly  the  basis  of  classification  of  the  various 
types  of  gasolene  gas  lighting  systems. 

16.  What  is  the  principal  hazard  of  this  system  of  lighting? 

17.  What  is  Blaugas? 

18.  How    is   Blaugas  used   and   what    is   your  opinion  of    its 
hazard  under  these  conditions? 

19.  What    hazards   do  you    recognize    in   the    ordinary  cook 
stove,  and  how  would  you  guard  against  them? 


92  LECTURES  ON  FIRE  INSURANCE 

20.  How  should  stove  pipes  be  arranged?  State  a  few  par- 
ticularly bad  features  to  guard  against. 

21.  What  is  the  principal  hazard  in  connection  with  the  use 
of  gas  stoves  ? 

22.  Describe  the  best  construction  for  a  chimney. 

23.  Give  the  principal  hazards  of  the  follow^ing:  ((?)  water 
wheels;   {d)  steam  engines;   (c)  gas  or  gasolene  engines. 

24.  What  is  producer  gas  and  name  the  principal  systems  of 
manufacture. 

25.  Briefly  describe  a  typical  producer  plant. 

26.  What  are  the  principal  hazards  of  a  producer  gas  svstem  ? 

27.  W^hat  are  the  principal  methods  of  transmitting  power, 
and  the  hazards  involved? 

28.  What  is  the  function  of  oiling  from  the  standpoint  of  fire 
protection? 

29.  What  kind  of  boilers  are  not  allowed  under  the  laws  of 
Massachusetts? 

30.  What  is  the  difference  between  the  following  tvpes  of 
boilers:  (a)  lap  seam;  (6)  butt  and  strap;  (c)  flue;  (d)  water 
tube. 

31.  What  is  a  Dutch  oven? 

32.  How  should  boilers  be  located  to  reduce  the  hazard  to  a 
minimum? 

33.  Describe  some  hazards  of  use  in  connection  with  boilers. 

34.  Do  smokestacks  cause  fires?     If  so,  how? 

35.  Give  a  few  rules  to  prevent  spontaneous  heating  of  coal. 

36.  State  the  peculiar  characteristics  of  charcoal,  and  their 
relation  to  the  hazard. 

37.  If  asked,  "How  to  prevent  danger  of  fire  from  sweep- 
ings," what  would  be  your  answer? 

38.  What  oil}-  materials  are  common  causes  of  fire? 

39.  What  are  the  characteristics  of  gasolene,  and  some 
methods  of  use  that  are  hazardous? 

40.  Write  a  short  essay  on  ''  .Should  Safety  Matches  Be  Re- 
qu  i  red  by  Law  ? ' ' 


COMMON  FIRE  HAZARDS  93 


41.  How  would  you  reduce  the  hazard  of  locomotive  sparks? 

42.  What  is  the  primary  function  of  lightning-  rods,  and  how 
is  this  affected  ? 

43.  How  should  a  building  be  properly  rodded? 

44.  What  kinds  of  incendiaries  are  there,  and  which   do  you 
consider  the  worst  offender? 

45.  Give  briefly  the  principal    hazards  of  the  seasons  and  of 
the  two  great  national  holidays. 


BBLIOGRAPHY 

Chicago  Board  of  Underwriters:  Specifications  for  safeguarding 
hazards.  Edition  of  1908,  revised  to  August,  1911.  Pam. 
93  pp.     Chicago,  1911. 

Crosby,  Everett  U.  and  Fiske,  Henry  A.  :  Crosby-Fiske  Hand- 
book of  Fire  Protection.  Fourth  edition,  495  pp.  Louisville, 
1909.      The  Insurance  Field  Co. 

Griswold.  F.  M.  :  Heating  and  ventilating  systems.  Quarterly 
of  the  National  Fire  Protection  Association,  1907:62. 

Hartford  Fire  Insurance  Company:  Fire  Prevention  and  Insur- 
ance.     Pamphlet.      Hartford,  1911. 

Martin.  Frank  B.  and  Davis,  G.  M.  :  Fire  Brands,  219  pp.  Bos- 
ton,   1911.      Little  Brown  Co. 

Matthews,  W.  D.  :  Manual  of  Inspections.  304  pp.  Louisville, 
1908.      The  Insurance  Field  Co. 

Moore,  Francis  C.  :  Fire  insurance  and  how  to  build.  Illus.  800 
pp.      New  York.  1903.      Baker  &  Taylor  Co. 

National  Board  of  Fire  Underwriters:  Rules  and  requirements 
...  as  recommended  by  the  National  Fire  Protection 
Association: — 

Kerosene  Oil  Pressure  Systems. 

National  Electrical  Code. 

Acetylene  Gas  Machines  and  Storage  of  Calcium  Carbide. 

Gasolene  Vapor  Gas  Lighting  Machines. 

Gasolene  Stoves  for  Cooking  and  Heating. 


94  LECTURES  ON  FIRE  INSURANCE 

Gas  and  Gasolene  Engines. 

Coal  Gas  Producers. 

Storage  of  Inflammable  Oils. 

Suggestions  for  Protection  against  Lightning. 

Rochester  Chamber  of  Commerce,  Rochester,  N.  Y. :   The  pre- 
vention of  fires.      Pamphlet,  1911. 

Spectator   Company:    Fire   prevention  and  protection.      416  pp. 
New  York,  1901.      Spectator  Co. 


SHOE  FACTORIES:    PROCESSES  AND  FIRE  HAZARDS 

Massachusetts  ranks  first  among  the  states  in  the  production  of  Introduction, 
shoes  and  boots.      Forty-tive  per  cent  of  all  those  produced  in  the 
United  States  were  from  the  Massachusetts  factories.     About  tifty- 
tvvo  per  cent  of  all  was  produced  in  New  England,  therefore  shoe 
factories  are  of  particular  interest  to  underwriters  of  this  vicinity. 

The  chief  competitors  of  New  England  in  the  shoe  business 
are  St.  Louis,  Mo.,  and  Newark,  N.  J.  The  latter  city  produces 
the  higher  grades  of  shoes.  In  New  England  the  large  centers  are 
Brockton,  which  produces  mostly  men's  shoes,  Lynn,  producing 
ladies'  shoes,  and  Haverhill,  called  the  "  Slipper  City."  Man- 
chester, N.  H.,  is  a  shoe  center  which  is  increasing  rapidly  in  this 
line.      Boots  are  made  largely  in  Maine  and  western  Massachusetts. 

Shoe  factories  vary  somewhat  in  the  type  of  building  used  Construction, 
with  the  locality.  Haverhill  has  four  to  five  story  brick  city  blocks 
with  an  occasional  detached  shop  of  somewhat  superior  construc- 
tion. Floors  and  roofs  are  joisted  in  the  older  shops,  plank  and 
timber  lieing  used  in  the  newer  ones.  Many  of  these  shops 
deri^■e  their  power  and  heat  from  outside  sources. 

Lynn  has  four  to  eight  story  brick  city  buildings,  mostly  of 
joisted  construction.  They  are  a  little  more  separated  than  are  the 
shops  in  Haverhill,  but  form  a  large  conflagration  district.  They 
are  as  a  rule  too  high  to  be  good  risks.  Most  of  them  have  their 
own  power  plant. 

The  shops  of  Brockton  and  vicinity  more  nearly  represent  the 
typical  New  England  shoe  shop.  This  type  of  shop  is  a  four  or 
five  story  wooden  structure  of  joist  or  plank  on  timber  construction, 
usually  with  a  brick  power  plant  adjoining. 

Many  of  the  older  shops  have  so  developed  as  to  form  a 
rambling  type  of  construction  with  large  areas.  By  the  erection  of 
ells  and  wings  a  hollow  square  has  often  been  formed  by  the  build- 
ings, making  an  arrangement  which  is  defective  from  a  fire  protec- 
tion standpoint.  Lack  of  fire  walls  at  proper  intervals  to  divide  the 
risks  into  fire  sections  is  a  general  defect  of  the  larger  shoe  shops. 


96  LECTURES  ON  FIRE  INSURANCE 


Of   late   there   is  a  tendency  toward  using   Hreproof   construction. 
Such  buildings,  of  course,  represent  the  be>t   risks  of  their   class. 
Most  shoe  shops  are  fully  equipped  with  automatic  sprinklers. 
Raw  Stock.  ihe   materials   used  in   manufacturing  shoes  are  sole  leather, 

upper  leather  (of  calf,  sheep  or  goat  skins),  cotton  cloth  for  linings, 
leatherboard  or  other  leather  substitutes,  light  leather  for  facings 
and  trimmings,  linen  thread,  and  shoe  findings,  such  as  eyelets, 
hooks,  straps,  rands,  shanks,  etc.  Some  shops  purchase  their 
box  toes,  insoles,  outsoles,  counters,  heels,  rands  and  shanks  from 
manufacturers  who  make  a  specialty  of  such  parts. 

Lasts  are  the  wooden  forms,  turned  to  the  shape  of  the  feet, 
upon  which  the  shoe  is  built.  The  last  gives  the  shoe  its  size, 
shape  and  style.  In  shops  j^roducing  many  sizes  and  styles  a  large 
quantity  of  lasts  will  be  found.  Lasts  are  practically  worthless 
after  a  certain  style  shoe  for  which  they  ha\e  been  prepared  has 
been  withdrawn  from  the  market.  They  are  usualh  stored  in  large 
racks  inside  the  main  factory,  where  the  several  sizes  and  styles 
may  be  readily  accessible  in  executing  the  orders. 

Patterns  are  pastelioard  forms  ha^  ing  the  edges  bound  in  metal. 
They  are  used  to  cut  out  the  pieces  of  leather  which  are  to  form  the 
upper  part  of  the  shoe. 

Paper  boxes  in  which  the  shoes  are  packed  are  sometimes 
inanufactured  in  shoe  shops.  Sometimes  the  wooden  cases  are 
made,  but  generally  the  shooks  are  purchased  and  the  cases  nailed 
up  as  needed.     A  case  of  shoes  consists  of  twenty-four  pairs. 

Shoe  shops  are  quite  uniform  in  the  arrangement  of  their  pro- 
cesses, the  preparation  of  the  uppers  being  usually  on  the  top  floor, 
the  sole,  heel  and  counter  work  being  on  the  lower  floor,  and  the 
finishing  work  bet^veen.  This  brings  the  cutting  out  and  stitching 
at  the  top  of  the  shop  where  the  light  is  good  and  enables  the 
heavier  sole  department  machinery  to  be  kept  near  the  grountl. 
This  general  arrangement  of  course  is  not  found  where  a  s\u)p  has 
been  built  in  a  rambling  manner.  In  the  manufacture  of  men's 
shoes  the  cutting  departinent  will  occupy  approximately  twent\-  per 
cent  of  the  area,  stitching  about  twenty  per  cent  and  the  making  or 
assembling  about  forty  per  cent. 

The  storage  in  the  factor\  \\  ill  consist  of  u]:)per  leather,  sole 
leather  and  lasts.  A  large  \alue  of  upper  leather  can  l)e  stored  in 
a  comparatively  small  space.  It  is  ahvavs  of  interest  to  note  just 
where  this  leather  is  stored  and  to  learn  its  approximate  value. 

Finished  shoes   are  usualh-  shipped  from  the  shops  promptly. 


Occupancy. 


SHOE  FACTORIES :    PROCESSES  AND  HAZARDS  97 


but  in  some  cases  larj^e  \alues  of  these  are  kept  on  hand.  vShoes 
should  preferalily  lie  stored  in  a  separate  storehouse  outside  the 
main  shop. 

Most  shops   have   boilers  and   an  engine    in  a  one  story  brick   Power, 
building-  adjoining  the  main  shop.      The  engine  is  usually  belted 
directly  to  the  shafting.      Leather  waste  and  factory  sweepings  are 
usually  burned  at  the  boiler. 

Some  of  the  newer  shops  have  electric  power  either  from 
outside  or  from  their  own  plant.  Motors  are  located  in  the  differ- 
ent departments,  so  belts  through  floors  can  usually  be  avoided. 
This  is  a  desirable  feature.  Some  small  shops  are  driven  by  gas 
or  gasolene  engines. 

Most  of  the  power  is  consumed  in  the  making  departments. 
But  little  power  is  required  in  the  cutting  and  stitching  rooms. 
A  moderate  amount  is  used  in  the  sole  departments. 

The  shops  are  usually  heated  by  steam,  with  the  pipes  at  the  Heating, 
sides.  There  are  a  few  using  hot  air  systems,  which  are  consid- 
ered safer.  There  are  no  side  aisles  in  shoe  shops,  it  being  cus- 
tomary to  place  the  benches  and  machines  close  up  to  the  walls. 
This  makes  it  hard  to  keep  the  steam  pipes  clean,  and  many  fires 
start  from  materials  collecting  in  and  around  the  steam  pipes. 
A  scrutiny  of  the  steam  coils  as  they  pass  behind  the  machines 
and  under  the  benches  is  a  necessary  part  of  a  shoe  shop  in- 
spection. 

Shoe  shops  are  mostly  equipped  with  electric  lights,  as  they  Lighting, 
should  be  in  all  cases.  Many  city  and  tenant  shops  have  gas 
lights.  Open  lights  are  dangerous  in  shoe  shops  because  of  the 
necessary  presence  of  naphtha  fumes.  The  fire  record  very  posi- 
tively points  out  the  relatively  few  fires  from  electrically  lighted  as 
against  gas  lighted  shoe  shops.  The  risk  is  sometimes  lessened  in 
gas  lighted  shops  by  installing  electric  lamps  in  the  stitching 
rooms  and  in  other  portions  where  naphtha  is  used,  leaving  the 
greater  part  of  the  shop  lighted  by  gas.  If  gas  must  be  used,  the 
burners  should  be  located  high,  at  least  three  feet  above  the 
benches.  Naphtha  fumes  are  heavy,  and  so  trouble  may  be 
avoided  by  keeping  the  open  lights  high  up  in  the  room.  No  gas 
lighted  shop  can  be  considered  as  good  a  risk  as  one  with  a 
standard  electric  equipment,  other  features  being  equal. 

As  a  rule  shoes  are  about  three  weeks  in  process;  that  is,  the   Processes, 
finished   shoe    is    shipped    about   three   weeks    after   the   order   is 
started   through  the  shop.      Of  course  the  various  shops  may  vary 


98 


LECTURES  ON  FIRE  INSURANCE 


some  in  this  as  well  as  in  the  manner  of  operation  which  is  to  be 
described. 

The  shoe  manufacturer  acquaints  himself  with  the  tendencies 
of  his  trade  and  tries  to  anticipate  its  demands.  He  calls  in  the 
last  designer  and  the  pattern  makers,  explaining  his  desires  and 
suggesting  changes.  He  must  purchase  his  leather  or  arrange 
for  its  delivery  at  the  proper  time,  the  kind,  color,  etc.,  needed 
depending  on  the  demands  of  his  customers. 

When  an  order  is  received  it  is  entered  on  the  records  in 
every  detail,  so  that  the  style  and  kind  of  each  separate  part  may 
be  definitely  fixed  and  executed.      These  details  include   the   kind 


No.  1.  A  last;  No.  2.  An  upper;  No.  8.  An  insole;  No.  4. 
Shoe  lasted  and  ready  to  have  welt  sewed  on ;  No.  5.  Welt  partially 
sewed  on ;  No.  G.  Welt  entirely  sewed  on  and  shoe  ready  to  have  out- 
sole  laid;  No.  7.  An  oiitsole  ;  No.  8.  Shoe  with  outsole  laid  and  round- 
ed. Channel  lip  turned  up  ready  to  be  stitclied  ;  No.  9.  Shoe  with  sole 
stitched  on;  No.  10.  Shoe  with  heel  in  place;  No.  11.  Heel  trimmed 
and  slioe  ready  for  finishing. 


SHOE  FACTORIES:    PROCESSES  AND- HAZARDS  99 


of  upper  leather,  styles  of  patterns  used  in  cutting-  the  uppers, 
kinds  of  stays,  facings,  eyelets,  linings,  etc.,  style  of  last,  soles, 
insoles,  heels,  toes,  counters,  etc. 

A  tag  is  prepared,  giving  all  the  necessary  details  for  making 
the  shoes.  One  tag  accompanies  each  lot  of  shoes  which  pass 
through  the  shop  on  a  rack  or  truck  from  one  operation  to 
another  until  the  completion  of  the  shoes. 

There  are  three  methods  of  shoe  making,  the  names  indica- 
ting the  manner  in  which  the  soles  are  stitched  to  the  uppers. 

Turn  sJioes  are  made  on  the  last  wrong  side  out,  the  shoes 
being  turned  after  the  soles  are  stitched  on.  Of  necessity  this 
system  is  used  for  soft  soled  shoes,  mostly  women's  and  chil- 
dren's. 

McKay  shoes  are  those  having  the  soles  stitched  on  from 
the  outside  to  the  inside  of  the  shoe.  The  long  arm  shown  in  the 
picture  of  the  McKay  stitcher  reaches  up  inside  the  shoe,  making 
it  possible  to  place  the  stitching  in  its  proper  location. 

The  Goodyear  welt  process  is  used  in  making  the  better  Processes, 
grade  of  shoes.  It  requires  more  machinery  and  many  more 
operations  than  do  the  other  methods.  In  this  process  a  narrow 
leather  strip,  called  a  welt,  is  stitched  to  the  upper  and  then  the 
sole  is  attached  by  stitching  it  to  the  welt.  All  the  stitching  is 
done  outside  the  shoe,  leaving  the  inside  smooth.  As  the  Good- 
year welt  process  includes  all  the  work  done  in  shoe  shops,  it 
will  be  briefly  described.  The  lasts  and  patterns  having  been 
prepared,  the  work  is  started  in  the  upper  preparing  and  the  sole 
departments,  so  as  to  be  ready  for  assembling  on  the  lasts 
in  the  assembling  or  making  department.  The  processes  in  their 
sequence  are  as  follows 

1.  Cutting  uppers,  linings,  trimmings,  etc. 

2.  Stitching  uppers,  fitting  eyelets,  buttons,  etc. 
o.    Cutting,  trimming  and  preparing  soles. 

4.    Cutting,  pasting,  pressing  and  drying  heels. 
•3.    Cutting,   stiffening,    pressing   and    drying    counters    and   box 
toes. 

6.  Tacking  insole,  box  toe,  counter  and  uppers  to  the  last. 

7.  Lasting.      (Pulling  leather  tightly  over  last.) 

8.  Trimming  off  surplus  leather  at  bottom  of  uppers. 

P.    Sewing  on  welts.      (A  narrow  strip  of   leather  extending  out- 
ward all  around  the  shoe.) 
10.    Trimming  and  hardening  welt  into  position. 


too 


LECTURES  ON  HRE  INSURANCE 


Cutting 
Room. 


Fitting  or 
Stitching 
Room, 


Sole  Depart- 
ment. 


11.  Filling  up   the  space   between  welt   on    bottom  of   shoe   with 

cement  and  cork,  leatherboard  or  some  other  filler. 

12.  Cementing  the  outsoles  in  position. 

13.  Trimming  edges  and   forming  channel    in  the  sole   to  receive 

the  stitching. 

14.  Stitching  the  outsole  to  the  welt. 

15.  Cementing  channel  lip  down  to  cover  stitches. 

16.  Leveling.      (Pressing  sole  into  shape.) 

17.  Heel  nailed  on. 

18.  Trimming  heels,  edges  of  sole  and  buffing  off  the  leather. 

19.  Finishing.      (Waxing,  buffing  and  polishing. ) 

20.  Treeing.      (Ironing  with  hot  iron,  removing  stains  and  filling 

defects. ) 

21.  Lasts  removed,  cleaning,  laces  inserted,  packing,  shipping. 
The  parts  of  the  upper   cut   in   this    room    are   vamps,  tops, 

tips  or  caps,  tongues  or  fly  linings,  linings,  backing,  eyelet  or 
button  stays  and  back  stays.  Some  of  these  parts  may  be  pur- 
chased, but  they  usually  are  cut  out  by  hand.  The  leather  is 
spread  out  on  a  board,  the  pattern  is  laid  on  the  leather  and  a 
sharp  knife  passed  around  the  pattern  to  cut  out  the  leather.  In 
some  shops  "clicking"  machines  are  used.  These,  by  means  of 
dies,  do  the  same  work  as  is  done  by  hand,  The  leather  is 
selected  in  the  cutting  room  and  the  cut  parts  properly  marked 
and  stored  ready  for  use. 

Here,  sewing  and  similar  machines  are  used  to  stitch  the  cut 
parts  together,  to  attach  the  linings,  facings,  hooks,  eyelets,  ]iox 
toes,  buttons,  straps,  stays,  labels  and  ornamental  stitching. 

Before  stitching,  the  edges  of  some  of  the  pieces  are  shaved 
or  skived  off,  and  cemented  together.  Facings  are  also  cemented. 
Rubber  cement,  made  of  rubber  dissolved  in  naphtha,  is  used 
for  this  work.  It  is  the  principal  hazard  of  shoe  shops,  and  will 
be  later  described. 

Simultaneously  with  the  cutting  and  stitching,  the  soles  are 
prepared.  Dies  are  used  to  cut  out  the  soles  from  the  leather, 
large  presses  furnishing  the  power.  The  soles  are  afterward 
"rounded  out"  to  proper  size.  They  are  sometimes  pressed  by 
passing  them  between  rollers.  Splitting  to  the  proper  thickness 
is  also  done.  Insoles  are  cut  and  a  channel  formed  to  receive 
the  stitches  in  the  Goodyear  welt  process. 

Heels  may  be  made  of  solid  leather,  pasted  pieces  of  leather 
or  of   leatherboard.      The  top    lift,  or  outer  layer,   is    always    of   a 


< 


\02 


LECTURES  ON  FIRE  INSURANCE 


high  grade  leather.  Heel  stock  is  cut  out  by  dies,  the  pieces 
being  pasted  together  in  a  form,  put  under  high  pressure  and 
dried  by  hot  air. 

Cou7iters  a7id  box  toes  may  be  made  of  solid  leather,  leather 
waste  or  leatherhoard.  Canvas  is  sometimes  used  for  boxed  toes. 
It  is  stiffened  with  shellac.  Counters  are  waxed.  These  parts 
are  cut,  formed,  pressed  and  dried.  Shanks  are  used  to  support 
the  sole  at  the  instep.  They  are  small  strips  of  steel  or  wood, 
sometimes  backed  with  leatherboard.  Heels,  counters,  shanks, 
etc.,  are  often  purchased  outside. 
Bottoming  ^h&  box  toes  and   counters  are   inserted    in  the  uppers  either 

Department,    in   the   fitting  room  or  the  making  room.      The   uppers   are  then 
placed  on  the  lasts  and  laced  up  into  their  proper  form. 

In  this  room  the  insoles  are  tacked  to  the  lasts  on  which  the 
upper  has  been  placed.  If  not  previously  done,  the  box  toes  and 
counters  are  inserted.  The  upper  is  then  carefully  "centered," 
tacks  being  placed  at  the  toe  and  heel  to  keep  it  in  place. 

The  pulling  over  and  lasting  machines  pull  the  upper  tightly 
over  the  last,  fastening  it  in  place  by  tacks.  The  surplus  part 
of  the  upper  beyond  the  tacks  is  cut  off.  The  welt  is  then  sewed 
on.  The  method  of  attaching  the  welt  and  stitching  the  soles  to 
the  welt  is  shown  in  the  cut.  The  stitcher  does  this  work  by  a 
curved  needle,  which  makes  it  possible  to  make  the  peculiarly 
difficult  stitch  through  the  insole,  welt  and  outsole  all  from  out- 
side the  shoe  while  the  latter  is  still  on  the  last.  The  fact  that 
the  last  can  be  kept  in  the  shoe  during  all  the  processes  gives  the 
shoes  the  superior  form  and  finish  only  possible  with  the  Good- 
year system.  There  are  machines  for  doing  other  minor  opera- 
tions in  the  making  room,  as  shown  by  the  list  of  operations 
previously  given. 

The  filling  up  of  the  channel  or  space  formed  between  the 
inner  and  outer  soles  deserves  our  attention,  as  the  fillings  used 
may  be  compounds  of  hazardous  materials.  Cork  and  rubber 
cement  is  generally  used.  Sometimes  a  preparation  called 
"Besto"  is  used  which,  although  inflammable,  contains  no 
naphtha.  When  the  top  lift  of  the  heel  is  put  on  it  is  usually 
cemented,  as  it  is  forced  on  over  the  nails,  which  do  not  show  from 
the  outside. 

The  manner  in  which  the  soles  of  turn  shoes  are  stitched 
to  the  uppers  is  shown  and  also  the  McKay  stitch  where  the 
stitching    passes  from  the    inside   of    the    shoe    to    the    outside. 


104  LECTURES  ON  FIRE  INSURANCE 

There  is  no  deep  space  or  channel  to  lie  filled  in  this  shoe.      The 
extra  stitching  on  the  outer  edge,  called  the  ''fair"  stitch,  is  used 
in  imitating  the  Goodyear  welt. 
Finishing  The  welt,  edge  of  sole  and  heels  are  rounded  off  anri  trimmed 

Department,    in   the   bottoming  department.      These  machines  produce   leather 
waste,  which  is  removed  by  a  blower  exhaust  system. 

The  finishing  comprises  trimming  and  hardening  the  edges 
of  the  soils  and  heels,  buffing  off  the  leather,  removing  signs  of 
imperfections,  and  polishing. 

The  buffing  is  done  on  rollers  revolving  at  about  seven  thou- 
sand revolutions  per  minute,  which  are  covered  with  sanded 
paper.  Blow  tubes  exhaust  the  dust  from  these  machines. 
These  machines  usually  have  air  coole'd  bearings.  Edge  hardeners 
or  setters  have  a  rapidly  operating  die  or  hammer  which  delivers 
thousands  of  blows  j^er  minute  to  the  edge  of  the  sole.  The 
hammer  is  heated  by  gas  or  gasolene  flame  so  as  to  soften  the  wax 
which  the  process  forces  into  the  leather.  The  shoes  are  blacked, 
stained  and  polished  thoroughly,  rapidly  revolving  bristle  and 
cloth  wheels  being  used  for  this  purpose.  After  stamping  the 
name  or  trade  mark  the  lasts  are  removed.  Treeing  is  a  final 
finishing  process  where  all  defects,  spots  and  wrinkles  are  elimi- 
nated. The  machine  consists  of  devices  for  holding  the  shoe  in 
form  so  as  to  be  convenient  for  the  workman.  Hot  irons  are  used 
in  this  work.  They  may  be  heated  by  oil  stoves,  gas  stoves  or 
by  electricitv.  After  treeing,  the  laces  are  inserted  and  the  shoes 
packed  in  paper  boxes  and  wooden  cases. 

SPECIAL  HAZARDS* 

The  presence  of  benzine  or  naphtha  and  rubber  cement  consti- 
tutes the  important  special  hazard  of  shoe  shops.  This  hazard 
is  less  in  boot  factories  than  in  shoe  shops  and  less  in  the  shops  pro- 
ducing women's,  children's  antl  the  cheaper  men's  shoes  than  it  is 
in  shops  manufacturing  the  Goodyear  welt  anil  high  grade  shoes. 

Carelessness  and  general  contempt  f(jr  the  dangerous  qualities 
of  naphtha,  obtaining  on  account  of  the  daily  use  of  it,  cause  a  great 
main'  fires.  0]ien  lights  or  other  open  flames  should  not  be  j^resent 
where  na])htha  or  cement  is  used.  It  is  not  possible  to  do  away 
entirelv  with  open  flames  in  shoe  shops  but  where  they  exist  they 


*  Taken  in  part  from  "  Shoe  Factories,  Their  Processes  and  Hazards,'" 
bv  Winthrop  P.  Tenney,  National  Fire  Protection  Association,  Special 
Hazard  Bulletin  No.  ID,  Page  3. 


J06 


LECTURES  ON  FIRE  INSURANCE 


Special 
Hazards. 


should  be  kept  well  above  and  away  from  the  naphtha.  Naphtha 
fumes  are  hea\  ier  than  air,  and  if  open  flames  are  near  the  floor  the 
danger  is  increased. 

Rubber  cement  has  proved  to  be  of  the  utmost  ^  alue  to  shoe 
manufacturers.  It  has  powerful  adhesi\  e  and  waterproof  qualities 
and  bends  easily  without  cracking.  It  is  made  by  dissolving  small 
pieces  of  rvdiber  in  naphtha  and  thoroughlv  mixing.  In  this  condi- 
tion it  forms  a  viscous  fluid,  from  which  the  naphtha  rapidly  evap- 
orates. Rubber  cement  is  never  manufactured  in  shoe  factories 
but  the  continuous  evaporation  necessitates  the  addition  of  more 
naphtha  from  time  to  time  for  thinning  purposes,  so  that  more  or 
less  free  naphtha  is  always  in  use  and  the  fumes  are  always  present. 
Rubber  cement  is  delivered  at  the  factory  in  amounts  varving  from 
one  to  ten  barrels.  These  are  usuallv  left  outside  or  placed  in  a 
detached  cement  house. 

Everv  factorv  (except  some  citv  tenant  risks  which  recei\'e 
supplies  dailv)  has  a  cement  house  or  some  enclosure  for  the  storage 
of  rubber  cement,  naphtha,  alcohol  and  the  like.  It  is  usually  sit- 
uated ten,  twenty  or  thirtv  feet  from  the  main  factory,  but  some- 
times adjoining  or  even  connecting ;  generallv  a  cheap  one-storv 
frame  building  (in  rare  cases  brick)  in  a  better  or  worse  state  of 
preservation.  Some  excellent  modern  fireproof  houses  have  been 
l^uilt.  The  volatiles  are  stored  in  metal  tanks  and  handled  by 
measuring  pumps.  This  makes  the  safest  method  vet  devised  for 
storing  naphtha  and  cement.  Cement  houses  should  properlv  be 
of  fireproof  construction  at  least  thirtv  feet  from  the  factorv. 
Underwriters  luiderstand  so  Avell  the  dangerous  nature  of  rubber 
cement  and  naphtha  that  almost  all  policies  contain  a  clause  limit- 
ing the  amount  in  the  factorv  to  a  dav's  supplv  and  declaring  the 
policv  void  if  cement  is  stored  in  buildings  covered  by  the  policy. 
It  is  certainly  a  most  reasonable  restriction.  Many  fires  start  at  the 
cement  house  which,  were  the\  inside,  would  at  once  prove  serious. 
The  cement  house  should  be  kept  locked  at  all  times  when  not  in 
use.  Some  respozisible  man  should  be  delegated  to  obtain  whatever 
naphtha  or  cement  is  needed.  Young  boys  often  ha\  e  this  work  in 
charge,  and  think  it  is  a  good  chance  to  enjoy  a  cigarette,  or  in  case 
the  cement  runs  slowly,  thoughtlcsslv  light  a  match  in  order  to  find 
tlie  trouble.  Needless  to  sa\-  that  thev  find  it  in  short  order.  The 
cement  should  be  drawn  in  strong  cans  and  brought  to  the  se\eral 
rooms  where  needed.  At  the  close  of  work  for  the  day,  what 
remains  should  be  remo\ed  to  the  cement  house.      The  cans  should 


SHOE  FACTORIES:    PROCESSES  AND  HAZARDS  107 

not  1ie  tilletl  at  night  and  no  lights  shoiikl  be  allowed  in  the  cement 
house. 

Rubber  cement  is  used  in  almost  all  shops  for  sticking  the  Special 
edges  of  uppers,  linings  and  facings.  It  is  usually  spread  on  with  Hazards, 
a  brush.  The  cans  from  which  it  is  used  are  of  sheet  iron  or  pre- 
ferably of  heavy  cast  iron.  The  cans  are  designed  to  expose  a 
minimum  amount  of  cement  to  the  air,  so  that  the  evaporation  will 
be  as  little  as  possible.  Sometimes,  but  not  often,  a  gravity  feed 
system  for  supplying  cement  is  found.  It  consists  of  a  sheet  iron 
reservoir  holding  about  nine  gallons  connected  by  a  series  of  piping 
to  several  cast  iron  saucers,  the  supply  to  these  being  controlled  by 
vahes  imder  the  bench.  The  reservoir  is  supplied  by  15-gallon 
cans,  which  are  brought  into  the  building  during  the  day  and 
remo\ed  at  night.  The  arrangement  does  not  appear  to  be  particu- 
larly hazardous,  but  certainh",  from  a  tire  point  of  view,  it  is  not  an 
impro\  ement  on  the  method  of  using  cement  from  open  saucers  ; 
nor  can  it  be  considered  as  satisfactory  as  to  use  heavy  cast  iron 
safety  pots,  owing  principally  to  the  larger  amount  of  cement  neces- 
sarily kept  in  the  building.  The  \al\es  controlling  the  supply 
might  be  left  open  and  also  cause  trouble. 

Cc?}ienting  of  soles  or  taps  is  done  in  the  sole  cutting  room. 
Formerly  this  ^vas  all  hand  work,  but  now  most  of  the  factories  use 
a  regular  sole  cementing  machine,  consisting  of  two  rollers,  the 
lower  one  of  which  is  corrugated  and  fits  into  a  covered  cement  pot 
holding  from  one  to  two  gallons.  The  sole  is  passed  rapidly  be- 
tween the  rollers  and  is  coated  with  cement.  Where  both  sides  are 
to  be  coated,  as  with  taps  or  middle  soles,  an  additional  cement  pot 
is  attached  al)o\e  the  top  roller  and  the  ceinent  is  alhnxetl  to  flow 
onto  both  rollers. 

In  manufactm'ing  the  ''Gem  insole,"  rubber  cement  is  cjuite 
generalh'  used.  The  outfit  consists  of  a  special  cement  pot  for 
coating  strips  of  can\as  or  cotton  duck,  which  is  then  attached  to  a 
specially  prepared  insole.  The  strip  of  canxas  passes  down  into 
the  cement  and  over  to  a  bench  some  tlistance  away.  The  e\apor- 
ation  of  naphtha  from  so  much  exposed  cloth  diffuses  fumes  in  great 
quantities,  creating  a  \qx\  great  danger  of  an  open  light  starting  a 
fire.  The  cloth  should  pass  o\  erheatl  through  a  drier  connected 
with  the  outer  air,  so  that  most  of  the  fumes  will  pass  outside. 

Naphtha  black  or  dip  blacky  which  is  used  in  upper  cutting 
or  sometimes  stitching  rooms,  is  a  mixture  of  lampblack  and 
naphtha.      With  this   licjuid  the  edges  of  the  uppers  are  dipped  or 


}08 


LECTURES  ON  FIRE  INSURANCE 


lirushcd  to  color  tht'iii.  Open  liojhts  should  iKJt  be  allowed  in  the 
\  icinity  and  the  dip  should  be  used  from  safety  pots  or  vessels  with 
covers.      The  vessel  containintj  the  dip  black  should  have  a  cover. 

Oiiproof  is  put  on  the  inner  part  of  the  outer  sole  to  prevent 
the  natin-al  oil  in  the  u])))ers  frcnn  staining;  the  sole.  It  is  made  of 
gelatine  and  carbolic  acid  and  other  ingredients  dissolved  in  naphtha. 
It  is  generally  found  only  in  high  grade  shoe  factories.  No  open 
lights  should  be  alhnved  near,  and  it  should  be  used  from  safetv 
cans  or  covered  \  essels. 

Waterproofing  mixtures  are  apt  to  contain  naphtha.  This  is 
especially  true  of  "  \'iscol."  Some  of  the  compounds  in  use,  how- 
ever, contain  no  naphtha  and  cannot  be  considered  anv  more 
hazardous  than  ordinary  oils.  At  ordinarv  temperature  thev  are 
solid,  and  before  using  it  is  necessarv  to  heat  them,  which  is  usually 
accomplished  by  means  of  a  steam  coil.  The  temjierature  is  not 
great.  When  naphtha  is  used  at  all  as  a  soh  ent  the  work  of  w  ater- 
proofing  should  be  done  outside  the  building  and  the  utmost  care 
used  in  conductintr  the  w  ork. 


rtVye"*-?^!  Ilia's 


Method  of  stitclnng  the  welt,  upper,  insole  and  outer  sole 
together  in  the  Goodyear  Welt  PrcK-ess. 


SHOE  FACTORIES:    PROCESSES  AND  HAZARDS 


109 


I}i  tJie  iiiakiug  room  the  lM)tt()iii  of  the  inner  sole  is  usualh 
given  a  coat  of  cement  before  g'oin<i,'  to  the  sole  la\inj4  machine. 
Rubber  cement  is  also  used  for  stickin*;-  clown  the  outer  sole  chan- 
nels to  hide  the  stitches.  The  work  was  formerly  done  by  hand, 
the  cement  bein<4'  ke]:)t  in  some  form  of  hea\  y  can  and  drawn  into 
and  used  from  open  cu])s.  "J'his  method  has  largely  l)een  super- 
seded b\'  machines. 

The  Jilling  of  cork  or  ground  leather  is  also  applied  in  this 
room.  Rubber  cement  is  thorou^hh  mixed  with  the  oroimd  coi"k 
or  leather,  and  the  combination  is  daubed  on  the  bottom  of  the  inner 
sole  to  fill  up  the  channel  formetl  b\'  the  welt.  Filling"  mixtures  are 
pi'epared  outside  in  the  more  carefidly  operated  shops. 

Ill  the  Jiuishhig  room  naphtha  is  used  only  at  the  repairers' 
benches  and  by  the  treers.  It  should  be  used  from  safety  cans 
or  closed  vessels  and  the  open  lights  kept  well  away  from  the 
fumes.      A   sponge  is  usually  used  in  this  v^^ork. 


Metliod  (if  stitrliiii^  uppLTs  to  the  soU's;    turn  shoe  proeess. 

In  safeguarding  shoe  factories  against  the  hazards  of  rubber 
cement  and  naphtha  we  must  again  recognize  the  fact  that  naphtha 
fumes  and  open  lights  cannot  exist  together  without  the  danger 
of  fire  ensuing.  The  protection  of  shoe  factories  against  hazards 
of  this  kind,  therefore,  develop  along  these  lines:  first,  in  seeing 
that  no  open  lights  are  used  where  there  may  be  iiaphtJia  funies^ 
and  second,  by  keeping  the  naphtha  exposed  to  the  air  as  little 
as  possible.  The  nearer  conditions  approach  these,  the  fewer 
will  be  the  shoe  factory  fires  due  to  naphtha. 

In  the  heating  of  kit  tools  and  around  the  finishing  benches, 
open   lights   are   often   used.      The    small    alcohol    lamps    in   this 


no 


LECTURES  ON  FIRE  INSURANCE 


latter  place   give   rise  to  many  fires  which,  though  usually  small, 
may  become  so  numerous  as  to  be  a  matter  of  concern. 

The  several  devices  for  lessening  the  naphtha  fumes  in  the 
room,  as  previously  described,  all  depend  on  the  one  principle, 
that  of  exposing  to  air  and  consequent  evaporation  the  smallest 
amount  of  naphtha,  and  then  only  while  in  use.  In  this  particular 
the  methods  of  operators  vary  from  those  using  the  regulation 
safety  cans  and  enclosed  cementers  for  applying  cement  and 
naphtha,  to  those  using  open  dishes,  cups  and  Inrushes,  with  no 
evident  appreciation  of  the  danger. 


«"h>i«-r    so»e 


ttT«T     S  o ' < 


-Cai-r  sti%U 


"n-«eT    So 


\^ 


NV 


Method  of  stitcliing  McKay  shoes;    showing'  imitation  welt. 

Cutting  De-  A    great    many    fires    occur    in    the    cutting    room,  and    may 

partment.  usually  be  ascrilied  to  cutting  board  scrapings  which  are  produced 
in  dressing  off  the  boards  from  time  to  time.  These  thin  shav- 
ings of  wood  mixed  with  linseed  oil  dressing  form  a  specially 
dangerous  coml)ination  and  under  certain  circumstances  can  be 
relied  on  to  take  fire.  Indeed,  where  the  conditions  are  favorable, 
this  not  infrequently  happens  in  an  hour  or  two.  W^orkmen 
should  be  made  to  appreciate   the  seriousness  of  this   hazard   and 


SHOE  FACTORIES :    PROCESSES  AND  HAZARDS  HI 

strict  rules  should  be  enforced  by  the  room  foreman  respecting 
the  disposal  of  such  refuse.  The  best  way  is  to  put  them  outside 
at  once  or  provide  standard  metal  waste  cans  and  have  it  under- 
stood that  scrapings  are    to  be  deposited  in  them  as  soon  as  made. 

The  cans  should  be  emptied  every  night,  either  taken  to  the 
boiler  and  their  contents  burned  or  taken  outside  and  emptied  in 
a  safe  place.  If  it  is  customary  to  throw  scrapings  out  the  win- 
dows they  do  not  always  go  outside;  some  may  land  behind  the 
bench  and  lie  there  unnoticed.  Sometimes  when  care  of  hazards 
is  poor,  they  are  thrown  into  wooden  boxes,  swept  up  with  the 
rest  of  the  waste  or  left  in  a  small  bundle  and  forgotten  entirely. 
Too  much  stress  cannot  be  laid  on  the  disposal  of  cutting  board 
scrapings,  for  they  are  without  doubt  the  cause  of  many  fires  now 
attributed  to  strange  or  unknown  causes.  It  is  only  fair  to  state 
that  this  hazard  is  well  recognized  and  properly  cared  for  in  most 
shoe  factories. 

The  machinery  in  this  room  consists  of  sewing  machines  and   Fitting  or 
other  light  machinery,  so  the  hot  bearing  or   loose  pulley  danger  Stitching  De- 
is not  great.      The  uses  of  cement,  oilproof   and   edge   stain  have   partmcnt. 
already  been  described  which  comprise  the  principal    and  serious 
hazards    of    the    department.       Alcohol,   or    some    compound    of 
alcohol,  is  often  used  to  clean  linings. 

Crimping  is  folding  or  forming  the  upper  leather  which 
is  moistened  to  aid  the  work.  The  moisture  must  afterward  be 
dried  out.  It  is  not  a  hazardous  process  unless  the  driers  are 
heated  by  kerosene  oil  lamps  or  gas.  Steam  is,  of  course,  the 
proper  means  of  heating,  and  when  used  all  pipes  should  be 
properly  bushed  to  prevent  the  woodwork  from  charring.  The 
singeing  of  toe  tips  to  remove  the  roughness  of  the  edges  is  fre- 
quently dangerous,  for  as  these  parts  have  first  been  dipped  in 
naphtha  black,  the  singeing  fiame  may  ignite  the  fumes. 

An  average  sized  stitching  room  should  contain  not  over  the 
following  amounts  of  inflammable  liquids:  One  gallon  naphtha 
for  thinning  cement  or  cleaning;  one  gallon  alcoline  for  cleaning 
grease  from  the  parts  to  which  cement  is  to  be  applied;  five  gal- 
lons, or  a  day's  supply,  of  rubber  cement.  Linings  are  sometimes 
smoothed  out  by  being  ironed.  The  hazard  here  is  simply  due  to 
the  method  of  heating  the  irons. 

In   the    bottoming  or  making  department   the  use  of   rubber   Bottoming 
cement  in  laying  channels,  cementing  shoe  bottoms,  mixing  cork   Department. 
filling,  and  sole  and  heel  laying,  have  been  before  mentioned. 


Model  K  Goodyear  Welter 


SHOE  FACTORIES:    PROCESSES  AND  HAZARDS  U3 


The  other  especially  hazardous  work  is  found  at  the  edge 
setters  and  the  stitchers,  which  are  the  large  sewing  machines  used 
to  stitch  the  soles  to  the  uppers. 

The  cotton  or  linen  thread  used  for  sewing  is  run  through 
hot  pitch  or  wax  before  being  used.  This  is  obtained  in  a  solid 
form  and  is  placed  in  pots  attached  to  the  machines.  It  must 
necessarily  be  heated.  This  is  accomplished  in  various  ways. 
Most  of  the  old  machines  use  alcohol  or  oil  lamps  placed  directly 
under  the  pot,  which  method  is  found  to  have  caused  a  great 
many  fires,  due  to  the  wax  boiling  over  and  coming  in  contact 
with  the  flame.  Carelessness  in  filling  these  lamps  has  caused 
not  a  few  fires.  The  later  methods  of  heating  utilize  gas,  gaso- 
lene or  steam.  Workmen  sometimes  forget  to  turn  out  the  light, 
and  a  fire  ensues  from  this  cause.  Then  also  boiling  over  is 
just  as  likely  to  occur  as  where  heating  is  done  by  alcohol  or  oil 
flame.  The  best  method  makes  use  of  steam  either  directly  or 
indirectly.  Wax  pots  will  be  found  on  Goodyear  welters,  stitchers, 
McKay  sewers,  and  also  on  the  Goodyear  rapid  stitcher  bobbin 
winders.  The  customary  uncleanness  under  sitching  machines 
aggravates  considerably  any  fire  which  may  start.  The  floors 
underneath  these  machines  should  always  be  covered  with  sheet 
metal  and  cleaned   frequently,  as    they  are  necessarily  very   dirty. 

Edge  setters  are  heated  either  by  retort  gas  or  gasolene  gas. 
There  is  very  little  danger  from  the  former,  and  the  same  may 
be  said  of  gasolene  gas,  if  an  approved  carbureter  is  used  and 
filled  outside  the  building.  Such  a  carbureter  consists  of  a  small 
power  pump  with  pressure  regulator  delivering  air  to  a  mixing 
chamber  having  a  capacity  of  one  gallon  of  gasolene.  The  car- 
buretted  air  is  thence  conveyed  to  the  edge  setters  through  flexible 
rubber  tubing.  The  carbureter  should  never  be  filled  in  the 
building  or  at  night,  and  the  main  supply  of  gasolene  should  be 
kept  in  the  cement  house.  It  is  necessary  that  especial  care  be 
observed  by  the  foreman  of  this  room  in  seeing  that  all  lights  in 
use  are  extinguished  on  leaving  for  the  night. 

The  principal    hazards    in   this  room,  other  than   the    use  of  Finishing  De- 
naphtha,  are   due    to   the  buffing   machines    and    the    methods    of  partment. 
heating  the  shoe   tools  used    in   ironing  and   smoothing  the   shoe 
upper.       Since    the    introduction    of    blower   systems    to   remove 
buffing  dust,  quite  a  number  of  small  fires  have  originated. 

lylower  systems  as  a  means  of  disposing  of  buffing  dust  have 
come  to  be  an  imporant  accessory  for  shoe  machinery    in   the   fin- 


Hi 


LECTURES  ON  FIRE  INSURANCE 


Blower 
Systems. 


ishing  room.  Every  well  appointed  shoe  factory  equips  such 
machines  as  edge  trimmers,  heel  shavers,  rough  rounders,  naum- 
keags,  bottom,  tip  and  tap  scourers  and  brushes  with  a  hooded 
metal  pipe,  into  which  the  leather  dust  and  buffings  are  drawn  as 
soon  as  made.  On  the  old  style  devices  the  pipes  from  the 
machine  discharge  directly  outdoors,  while  in  the  newer  systems 
the  buffings  are  drawn  through  a  fan  and  deposited  in  a  small  dust 
box  adjoining  the  factory.  The  buffings  and  dust  are  not 
specially  hazardous  themselves,  but  possibly  were  they  allowed 
to  accumulate  and  absorb  oil,  spontaneous  combustion  would  in 
time  take  place.  Then  again  some  trouble  might  be  caused  were 
the  dust  to  come  in  contact  with  open  lights.  Whatever  promotes 
the  general  cleanliness  is  of  value  in  lessening  the  chance  of  fire. 

The  inside  and  outlet  of  the  tube  must  necessarily  be  more  or 
less  covered  with  the  dust,  or  the  tube  may  be  pretty  well  filled 
with  dust  which  can  easily  be  ignited  either  from  sparks  or  spon- 
taneous combustion.  A  tube  is  also  a  good  thing  to  quickly  get 
a  cigarette  butt  out  of  sight  of  the  foreman,  and  doubtless  many  of 
these  fires  have  originated  from  smoking.  There  need  be  little 
speculation  about  these  fires,  however,  as  with  buffing  wheels 
running  from  one  to  six  thousand  revolutions  per  minute,  as  they 
do,  friction  alone  will  raise  particles  of  leather,  dust  or  oil  to  a 
temperature  where  combustion  can  take  place. 

The  method  of  heating  shoe  tools  causes  not  a  few  fires. 
Where  kerosene  oil  lamps  are  used  the  bench  should  be  tinned 
and  the  lamps  made  stationary.  A  good  arrangement  is  to  place 
the  lamp  inside  a  metal  box  above  the  level  of  the  naphtha  cup 
which  is  quite  generally  used  around  these  benches.  Gas  or 
electricity,  which  is  now  being  employed  in  the  newer  factories, 
is  certainly  the  better  method  of  heating,  and  the  room  foreman 
should  see  that  every  light  is  extinguished  before  leaving  for  the 
night.  A  red  pilot  lamp  should  he  provided  on  all  electric  heater 
circuits  to  indicate  whether  or  not  the  circuit  is  on  or  off. 
Heater  fires  can  thus  be  avoided. 

Only  a  sxnall  amount  of  naphtha  is  used  in  the  finishing 
room.  The  blackings,  dressings  and  waxes  mostly  contain 
ammonia,  turpentine,  borax,  aniline  colors,  castile  soap,  shellac, 
etc.,  but  no  naphtha,  as  with  it  a  polish  could  not  readily  be 
obtained.  The  "treers"  use  a  small  quantity  for  cleaning,  as  do 
the  repairers.  Many  fires  occur  at  the  repairing  benches,  but 
they  are  mostly  of  minor   importance  and   due  wholly  to  careless- 


SHOE  FACTORIES :    PROCESSES  AND  HAZARDS  US 


ness.      Fires  are  sometimes  caused  by  the  gasolene  heated  machine 
used  in  stamping  the  name  and  trade  mark  on  the  shoe  bottom. 

It  is  equally  true  of  shoe  factories,  as  of  any  factory  of  what-  Cleanliness 
ever  kind,  that,  considering  the  special  hazards  equal,  the  better  and  General 
the  cleanliness,  management  and  fire  protection  methods,  the  Manage- 
better  the  fire  risk.  Other  things  being  equal,  cleanliness  is  a  ™^"  * 
reliable  index  upon  which  to  base  our  estimate  of  a  risk.  In  the 
clean  risks  we  generally  find  the  best  care  of  fire  appliances,  the 
careful  safeguarding  of  hazards,  the  system  and  order  which  help 
make  it  a  good  business  proposition  as  well  as  a  good  fire  risk. 
The  disposal  of  "Maste  is  one  then  which  alike  interests  the  insur- 
ance companies  and  the  careful  manager.  Shoe  factories,  when 
running  at  anywhere  near  full  capacity,  in  the  course  of  several 
hours  always  produce  more  or  less  waste,  such  as  small  leather 
scrap,  cuttings,  trimmings  and  rubbish  of  various  kinds.  These, 
while  not  in  many  cases  hazardous,  if  allowed  to  remain  for  days 
at  a  time  might  develop  into  something  serious.  No  well 
ordered  shoe  factory  will  allow  this  rubbish  to  accumulate.  A 
man  should  be  employed  to  sweep  up  the  material  twice  a  day,  at 
noons  and  after  closing  at  night,  and  it  should  be  removed  at  once 
from  the  factory.  It  is  often  collected  in  wooden  or  metal  bar- 
rels ;  swept  through  trap  doors  or  down  some  style  of  waste 
chute.  Many  fires  originate  at  the  bottom  of  this  chute,  if  the 
waste  is  allowed  to  accumulate.  Some  of  the  chutes  are  con- 
structed of  wood,  perhaps  tin  lined,  and  poorly  shut  off  from  each 
floor.  These,  therefore,  often  serve  to  spread  a  fire.  Other 
chutes  are  constructed  of  brick  built  into  the  walls  of  the  build- 
ing. A  style  of  waste  chute  now  being  installed  in  some  of  the 
newer  factories  is  made  entirely  of  metal  and  placed  outside  of 
building  connecting,  though  shut  off  from  each  floor  by  heavy 
metal  doors.  It  is  a  very  neat  way  of  disposing  of  all  such 
sweepings.  A  waste  chute,  if  inside  the  building,  should  be  of 
brick,  with  heavy  metal  doors  at  the  floor  openings,  the  top  of 
the  chute  being  left  open  above  the  roof.  Waste  should  be 
removed  each  night  from  the  bottom  of  the  chute,  so  that  there 
shall  never  be  a  large  accumulation. 

Fires    have   been     mostly    in   making   and    finishing  rooms.    Location  of 
The  latter  has  the  most  special   hazard  fires,  those   in  the  making   Fires, 
room  being  more  from   the   common   hazards.      The  many  finish- 
ing room  fires  are  due  to  the  benzine,  buffing,  heating  tools,  etc. 
Twenty-eight  per  cent  started  in  these  rooms,  14^^  i^i  each. 


Model   K  (ioodyear  Stitcher;    showing  steam  generator  heated  by  gas 


SHOE  FACTORIES:    PROCESSES  AND  HAZARDS  Ul 


Twelve  per  cent  started  in  the  cutting  room.  These  were 
mostly  due  to  the  common  hazards  of  steam  pipes,  lights,  etc. 
Four  per  cent  were  due  to  the  special  hazards  of  this  room,  viz., 
cutting  board  scrapings. 

Eleven  per  cent  started  in  the  fitting  room,  mostly  due  to 
lamps  and  naphtha.  Open  lights  are  mostly  to  blame  for  this 
high  percentage  of  special  hazard  fires. 

Eleven  per  cent   started    in   the   boiler   room,  mostly    due   to   Location  of 
rubbish  and  fuel  kept  too  near  the  fire.      There  should   be  a  clear   Fires, 
space  of  10  feet  between  all  fuel  and  the  fire. 

There  were  but  4%  due  to  the  waste  chute. 

Few  fires  start   in  the  leather  and  packing  departments. 

Although  naphtha  is  used  so  much  in  shoe  shops,  it  does  not 
cause  the  greater  portion  of  losses.  The  available  records  show 
that  the  number  of  fires  is  just  about  equally  divided  between 
those  caused  by  special  and  those  caused  by  common  hazards. 
This  is  also  borne  out  by  the  record  of  day  and  night  fires,  47% 
being  in  working  hours,  and  53%  in  the  night.  If  we  investigate 
the  losses,  aside  from  the  number  of  fires,  we  find  that  the  common 
hazards  have  caused  the  greater  losses.  This  is  due  to  the  few 
large  fires  overbalancing  the  many  special  hazard  fires,  and  simply 
indicates  that  the  fire  protection  engineering  has  risen  to  meet 
the  special  hazards  in  the  large  majority  of  shoe  shops  so  as  to 
create  a  balance  between  the  two.  The  risks  may  be  judged  by 
their  exposure,  construction  and  general  protection  to  estimate  the 
possible  losses  rather  than  the  special  hazards,  unless  the  latter  are 
in  some  way  unusual  for  the  class. 

Coming  to  the  details  of  the  common  hazards  the  old  familiar 
untidiness  causes  2o%  ;  poor  care  of  power,  bearings,  etc.,  9%; 
lighting  4%.      These  last  were  mostly  in  gas  lighted  shops. 

Of  the  special  hazard  fires,  naphtha  and  cement  caused  23%  ; 
wax  pots,  6%  ;  scrapings,  4%  ;  shoe  tools,  4%  ;  waste  chute,  4%. 

The  naphtha  and  cement  fires  are  mostly  due  to  the  presence 
of  open  flames  where  these  materials  are  used. 

Poor  locations,  which  includes  exposure,  have  caused  greater 
losses  on  shoe  shops  than  all  the  naphtha  fires  combined.  Forty 
per  cent  of  all  the  large  losses  on  shoe  shops  are  from  exposure 
fires.  For  this  reason,  other  things  being  equal,  the  isolated 
shops  are  probably  better  risks  than  those  in  congested  districts. 
It  is  therefore  as  important  to  inspect  the  neighbors  as  the  partic- 
ular shop  in  question. 


Model  B  McKay  Stitcher 


SHOE  FACTORIES :    PROCESSES  AND  HAZARDS  119 


Poor  location,  poor  construction  and  the  neglect  of  the 
simplest  forms  of  protection  have  combined  to  create  a  greater 
fire  loss  on  shoe  shops  than  that  of  the  sum  total  of  all  special 
hazard  fires. 

Standard  shoe  shops  burn  down  very  rarely. 


QUESTIONS 

1.  State  in  general  the  relative  importance  of  the  shoe  industrv 
in  New  England ;  name  the  more  important  shoe  centers  and  the 
class  of  shoe  most  common  to  each. 

2.  Describe  the  construction  of  the  two  principal  t\pes  of  shoe 
shop;  (1)  the  citv  shop,  (2)  the  tvpical  comitry  shop. 

3.  Name  the  principal  materials  and  supplies  used  bv  shoe 
shops. 

4.  Describe  the  general  occupancy  of  shoe  shops ;  the  four 
principal  processes  and  tlie  usual  location  of  each  in  tlie  building. 

5.  Name  the  thi^ee  methods  of  shoe  manufacturing  which  are 
based  on  the  method  of  stitching  the  soles  to  the  uppers  and  point 
out  their  distincti^•e  feature. 

6.  Name  as  many  of  the  processes  in  the  manufacture  of 
Goodyear  welt  shoes  as  vou  can,  gi\ing  them  in  their  order  of 
sequence. 

7.  Give  the  principal  hazard  of  shoe  shops,  stating  in  ^\•hich 
rooms  or  processes  it  is  found  and  the  proper  methods  of  safe- 
guarding it. 

8.  Name  all  the  lesser  hazards  of  shoe  manufacturing  that  vou 
can,  describing  in  detail  the  use  and  proper  protection  of  the  more 
important  ones. 

9.  State  the  relative  merits  as  a  risk  of  a  shoe  shop  lighted  bv 
gas  and  one  electrically  lighted,  giving  in  detail  whv  one  is  to  be 
preferred. 

10.  Give  briefly  your  conclusions  as  to  the  shoe  shop  as  a  risk, 
based  on  the  fire  record. 


120  LECTURES  ON  FIRE  INSURANCE 


BIBLIOGRAPHY 

American  Exchange  and  Review:  A  survey  of  the  boot  and  shoe 
fire  hazard.      American  Exchange  and  Review,  37:144. 

Breed,  S.  O. :  Hazards  of  shoe  factories.  Quarterly  Bulletin  of 
Special  Hazards,  issued  by  the  National  Fire  Protection  As- 
sociation, Boston.     No.  7,  pp.  27. 

Gemmer,  \\\  F.  :  Boot  and  shoe  factories.  Norwich  Insurance 
Institute.  Norwich,  Eng.,  1898-99:6-5. 

Green,  John  P.  :  Boot  and  shoe  factories.  Journal  Insurance 
Institute  of  Great  Britain  and  Ireland,  2:.301. 

National  Fire  Protection  Association:  Fire  record  of  shoe  fac- 
tories. Quarterly  Bulletin  of  Special  Hazards,  No.  11.  pp. 
12-17. 

Rascn,  M.  B.,  and  Hadawav,  I.  B.  :  Modern  shoe  manufacture. 
Journal  American  Society  jSIechanical  Engineers.  March, 
1911. 

Tenney,  W.  P.  :  Shoe  factories.  Quarterlv  Bulletin  of  Special 
Hazards,  National  Fire  Protection  Association,  No.  10,  p.  3. 
Also  Report,  Underwriters'  Bureau  of  New  England,  Boston, 
Mass.,  No.  98. 


PART  11. 

FIRE  INSURANCE  RATES  AND 
RATE  MAKING 


NOTES  ON  RATES  AND  RATE  MAKING 
INTRODUCTION 

As  iiKlicated  elsewhere  and  as  will  he  e\  ident  froni  perusal 
this  discussion  is  elementary  and  is  intended  for  the  benefit  of 
students  who  ha\  e  made  little  or  no  preparatory  investigation  of  the 
suhject. 

Study  of  the  accompanying  bibliography  w'ill  show  that  there  Scope  of 
has  been  no  attempt  to  e\'ohe  new  theories,  but  that  the  lectures  Inquiry. 
are  merely  a  compilation  and  a  setting  forth  in  simple  form  of  the 
literature  and  accepted  facts  and  propositions  relative  to  the  subject. 
Acknowledgment  is  made  with  gratitude  to  the  many  authorities 
whose  works  have  been  used,  and  with  especial  appreciation  of  the 
writings  of  A.  F,  Dean,  Esc]. 

Where  mention  is  made  of  actual  practice  it  is  limited  by  the 
method  and  systems  now  in  use  in  New  England. 

Treatment  of  the  subject  diAides  naturally  into  ; 

I.   Preliminary  Explanations  and  Definitions. 
II.   History. 

III.  The  Problem. 

IV.  Schedule  Rating. 

I. 

PRELIMINARY  EXPLANATIONS  AND  DEFINITIONS 

1.  Rate.      The  percentage   representing  the  ratio  of  the  pre-  Definitions 
mium    (for  a   term   of  one  year  unless  specified  otherwise)  to  the  andExplana- 
sum  insured.  tions. 

Example  :  Sum  insured  .  .  .  $1000.00 
One  year  premium  .  .  .18.60 
Rate 1.86 

2.  Term  Rate.  The  rate  for  insm^ance  for  a  term  longer 
than  one  year. 


126  LECTURES  ON  FIRE  INSURANCE 


Definitions  Xote  :   It   is  customary    to    insure    dwelling  houses    and  their 

and  Explana-  contents  and  a  few  other  classes  of  risks  for  3  year  or  5  year  terms 
ions.  ,^j  ^  reduction ;  for  example 

Annual  rate,  say  ,  .  .  .25 

Term  rate,  3  year  .  .  .  .50 

Term  rate,  5  year  .  ,  .  .75 

3.  Short  Rate.  The  rate  for  a  term  shorter  than  that  speci- 
fied for  the  published  rate. 

Note  :  Uniform  short  rate  tables  are  used,  based  on  percentage 
of  the  annual  or  term  rate. 

Example  :  Annual  rate  ....        1.00 

Short  rate,  o  mcjntlis     .  .  .  .40 

Short  rates  are  most  often  used  in  computing  return  premiums  on 
policies  cancelled  by  the  insured.  The  uniform  percentage  tables 
coyer  all  terms  from  1  day  to  59  months.  The  short  rate  for  1  day 
being  two  percent  of  the  annual  premium,  and  for  59  months  being 
ninety-nine  per  cent  of  the  5  year  premium. 

4.  Specijic  Rate.  The  rate  for  an  indi\  idual  risk  specified 
by  location  and  description. 

5.  Mniinnim  Rate.  The  rate  for  any  and  all  risks  (not 
rated  specifically)  of  a  class  of  the  same  general  description  as  to 
physical   hazards. 

Note  :  Dwelling  houses  constitute  the  largest  and  most  impor- 
tant class  of  risks  insured  at  minimum  rates. 

6.  Blanket  Rate.  The  rate  for  a  blanket  form  of  policy ; 
/'.  e.,  one  which  coyers  and  includes  in  one  item  two  or  more  sep- 
arate  risks. 

Note  :  It  is  customary  to  insure  buildings  and  their  contents 
separately,  so  that  a  form  of  insurance  which  includes  in  one  item 
a  building  and  its  contents  requires  a  blanket  rate,  as  does  insurance 
coyering  two  or  more  buildings  and  [or]    their  contents. 

7.  Average  Rate.  A  single  rate  for  a  form  of  insurance 
which  coyers  two  or  more   risks  by  separate  items. 

Note  :  Property  of  cities  and  towns  and  of  public  seryice  cor- 
porations is  often  insured  under  policy  forms  which  group  a  num- 
ber of  risks  with  specific  amounts  of  insurance  applying  to  each, 
at  a  single  rate  based  on  the  ayerage  of  the  specific  rates  of  all. 

S.  Flat  Rate  (local  usage).  The  rate  for  a  polic\-  whose 
conditions  as  to  contriinition  in  the  e\ent  of  loss  are  not  modified 
1)\'  conditions  of  co-insurance. 


NOTES  ON  RATES  AND  RATE  MAKING  t27 


9.  Judgment  Rate  or  Committee  Rates  (local  usage). 
Rates  which  are  recorded  and  [or]  published  without  any  notation 
of  or  reference  to  items  considered  in  compiling  them. 

10.  Schedule  Rates.  Rates  which  are  recorded  and  [or] 
published  ivlth  notation  of  or  reference  to  systematic  compilation 
by  items,  usually  specific  charges  for  deficiencies  and  hazards,  and 
credits  for  good  featiu'es,  protection,  etc. 

11.  Key  or  Base  Rate.  The  uniform  rate  used  as  a  basis 
on  which  to  compute  schedule  rates  for  a  number  of  risks  of  a  given 
class  or  locality,  as  the  '■'■  base  rate  for  Metal  Worker  schedule,"  the 
"  key  rate  for  Boston." 

Note  :  A  key  rate  may  be  itself  the  result  of  a  sub-schedule 
application,  which  compares  the  physical  characteristics  of  cities 
and  towns,  considering  the  fire  and  loss  hazard  of  each  en  masse. 

B. 

Rates  are  made  by  fire  insurance  companies,  or  by  independent   By  Whom 

offices  or  individuals  for  sale  to  and  use  by  the  companies.  Rates  May 

r>      .7      r'       1        •  be  Made. 

JJy  the   Lojnpanies. 

1.  Directly  by  company  officers  or  by  surveyors  under  their 
immediate  supervision. 

Example  :  Factory  Insurance  Association. 

2.  By  company  field  men  (general  or  special  agents)  or  by 
surveyors  under  their  supervision. 

Example  :  New  England  Insurance  Exchange. 

3.  By  company  local  agents  or  by  surveyors  under  their  super- 
vision. 

Examples  :  Boston  Board  of  Fire  Underwriters. 
Insurance  Association  of  Providence. 
Independently. 

By  individuals  or  '■'bureaus"  who  prepare  and  publish  "  ad- 
visory "  or  "  recommended  "  rates  or  estimates.  Rates  so  furnished 
are  purchased  and  used  extensively  by  companies  in  states  whose 
laws  prohibit  the  companies  from  combining  to  make  rates  them- 
selves. 

c. 

Rates  are  pul^lished  in  book  form  or  on  indexed  cards,  and  the    Tariffs. 
complete  table  of  rates  for  a  locality,  county,  city  or  town,  is  called 
the  "  tariff." 

"  Tariff  Companies  "  are  those  which  underwrite  only  at  the 
rates  regularly  established  or  described  in  the  foregoing.      ''Non- 


J28  LECTURES  ON  FIRE  INSURANCE 


tariff  Companies"  or  '•  Xoii-Board  Companies"  do  not  participate 
in  the  computation  or  pul)lication  (^f  rates  nor  in  their  obser\ance 
when  made. 

QUESTIONS 

1.  How  would  \i)u  tlesi<4nate  a  I'ate  for  a  policy  to  run  five 
years  ? 

'2.  Explain  the  difference  between  an  average  rate  and  a 
blanket  rate. 

3.  Explain  the  difference  between  specific  and  minimum 
rates. 

4.  Explain  the  difference  between  committee  rates  and  sched- 
ule rates. 

5.  Compute  the  average  rate  for  the  following  group  of  three 
risks,  viz. 

Risk  A.     Value  $10,000.      rate     .  .  .  .35 

Risk  B.      Value     18,000.     rate     .  .  .        1.25 

Risk  C.     Value       2,500.     rate     .  .  .        l.HO 

II. 

HISTORY 

Foreign.  There    is   no    available   information   as  to  the  details  of 

earliest  insurance  schemes,  although  there  were  doubtless 
many   local  enterprises  in  Europe  and  the  East. 

1609  A  municipal  fire  insurance  plan  was  proposed  to  a  Count 

Von  Oldenberg,  which  included  a  contribution  or  assess- 
ment of  £1  per  €100  of  valuation,  or  a  rate  of  1%. 

Nothing  came  of  it,  for  the  Count  was  both  religious  and 
sensitive,  and  said  he  was  afraid  such  a  scheme  would  be  a 
temptation  to  Providence,  and  furthermore,  that  he  would  be 
accused  of  taxing  his  people  for  his  own  benefit. 

1667  After  the  Great  Fire  of  London  in  1(566  the  city  was  rebuilt 

very  slowly.  One  of  the  liveliest  real  estate  operators  of  the 
period  was  Dr.  Nicholas  Barbon,  who  was  originally  a  phy- 
sician, the  son  of  Praise-God  Barebones  of  Cromwell's  Par- 
liament. His  two  uncles  were  named  respectively  Christ- 
came-into-the-world-to-save  Barebones  (known  as  "Saved 
Barebones"  for  short),  and  If-Christ-had-not-died-thou- 
hadst-l)een-damned  Barebones  (known  as  "Damned  Bare- 
bones.")! 


NOTES  ON  RATES  AND  RATE  MAKING  J29 


1681  Dr.  Barbon  set  up  an  office  for  insuring  property  against  Foreign 

loss  by  fire,  and  the  first  record  which  we  have  of  his  rates, 
dated  1681,  provides  for  policies  for  terms  of  7,  11,  21  and 
31  years,  probalilv  conforming  to  the  leasehold  periods  of  that 
day.  Rates  were  determined  by  the  annual  rental  value; 
/.  e.,  if  the  rental  value  was  £1  the  premium  was  2s.  fid. 
for  7  years,  5s.  or  twice  the  7  year  rate  for  21  years,  for  £10 
insurance. 

These  were  for  brick  or  stone  buildings.  For  wooden 
buildings  these  rates  were  doubled.  The  amount  insured 
was  to  be  paid  as  often  as  the  buildings  described  or  those 
which  replaced  them  were  destroyed  by  fire  within  the  term 
of  the  insurance. 

1690  The  method  of  determining  the  rate   was  changed  to  a 

basis  of  building  valuation,  and  tallies  of  rales  were  pub- 
lished for  1,  2,  3,  4  and  7  years.  The  rate  for  4  years  was 
3i  times  the  1  year  rate,  5  annual  rates  for  7  years. 

For  a  building  valued  at  £100  the  annual  rate  was  6s. 

1708  The  insurance  of  goods  and  chattels  was  attempted  for  the 

first  time,  rates  being  same  as  for  Iniildings. 

1710  Proposals  of  the  Sun  Fire  Oflice  quoted  rates  as  follows, 

per  £100:  1st  quarter.  Is.  stamp  duty;  2s.  fid.  premium, 
which  included  subscription  to  the  British  ^fercury. 
Afterward,  per  quarter  2>;.  6d.  with,  or  2s.  without  British 
^Icrcury. 

This  refers  to  the  quarters  of  the  calendar  year,  and  pay- 
ments were  due  on  ''Quarter  Day"  and  were  called 
Quarterage. 

Soon  after,  the  Sun  published  what  corresponds  in  a  way 
to  a  short  rate  table  for  those  \\ho  took  out  insurance  in  the 
second  or  third  month  of  a  quarter. 

1720  The  Sun  quoted  rates  for  insurance  not  exceeding  £500: 

2s.  6d.  per  quarter  with  a  book  entitled  the  "Historical 
Register;"  £1,000  at  5s.  per  quarter;  £300  at  2s.  per 
quarter.      There  was  no  classification. 

The  same  year  the  Royal  Exchange  Assurance  proposals 
quoted  for  buildings  of  all  classes  and  for  contents  with 
certain  exceptions: — 

"For  policies  of  not  over  £1,500,  brick,  5s.  per  annum 
for  £250 ;  wood,  8s.  per  annum  for  £250. 


130  LECTURES  ON  HRE  INSURANCE 


For  policies  exceeding  £1,.")00  the  rates  were  7s.  6d.  for 
each  £1-30  on  or  in  brick  or  stone  l)uildings,  12s.  per  £150 
on  or  in  wooden  buildings. 

Extra  hazardous  occupancy  such  as  breweries,  distilleries, 
bakeries,  etc.,  to  pay  the  highest  of  the  foregoing  rates." 

From  the  middle  of  the  eighteenth  century  the   develop- 
ment of  rating  in  Great  Britain  and  other  foreign  countries 
was   not   unlike   that   in  the   United   States,  which  will   be 
described  more  fully. 
United  States.  17.") 2  The  Philadelphia  Contri])utionship,  or  "Hand-in-Hand" 

was  organized  to  insure  buildings  only.  A  deposit  only 
was  required,  the  expectation  being  that  the  interest  earnings 
would  pay  losses  and  expenses.  For  a  minimum  term  of  7 
years  the  deposit  for  a  brick  liuilding  was  20s.  per  £100,  or 
1%,  and  for  a  frame  building  GOs.  per  £100,  or  3%. 

Additional  to  the  deposit  there  was  paid  to  the  ''Com- 
mon Fund"  Is.  Bd.  for  brick;  2s.  6d.  for  frame. 


1^95         FROM     POLICY     OF     THE     MASSACHUSETTS 
FIRE  INSURANCE  COMPANY 

RATES  OF  ANNUAL  PREMIUMS 
I. 

Houses  or  stores  with  brick  or  stone  walls,  and  slate, 
tile,  lead,  copper  or  composition  roofs,  standing  separate 
from   other  buildings,  70  cents  on  100  dollars. 

11. 

Houses  or  stores  with  In-ick  or  stone  walls,  and  slate,  tile, 
lead,  copper  or  composition  roofs,  connected  with  other 
buildings,  having  brick  partition  walls  of  one  or  more  feet 
above  the  roof  75  cents. 

III. 

Houses  or  stores  with  lirick  or  stone  walls  and  wooden 
roofs,  that  stand  separate  from,  or  connected  with  other 
buildings  with  brick  partition  walls  of  one  or  more  feet 
above  the  roof,  <S0  cents. 

IV. 

Houses  or  stores  with  brick  or  stone  walls  and  wooden 
roofs,  connected  with  other  l)uildings  without  brick  parti- 
tion walls,  85  cents. 


NOTES  ON  RATES  AND  RATE  MAKING  J3J 

V. 

Houses  or  stores  of  wood  or  plaster  walls,  standing  sep- United  States, 
arate  from  other  buildings,  90  cents. 

VI. 

Houses  or  stores  of  wood,  connected  with  other  buildings 
100  cents. 

Provided,  the  before-mentioned  buildings  are  not 
occupied  for  any  hazardous  trade,  or  for  storing  any  hazard- 
ous merchandise,  as  enumerated  in  the  following  article. 

VII. 

All  buildings  occupied,  in  whole  or  in  part,  by  any  per- 
son who  shall  use  or  exercise  therein,  the  trade  of  a  carpen- 
ter-joiner, cooper,  tavernkeeper  or  innholder,  stable-keeper, 
baker,  sugarboiler,  ropemaker,  boatbuilder,  maltdrier, 
brewer,  tallow  chandler,  apothecary,  chemist,  oil  and 
colour-man,  china,  glass,  or  earthenware-seller;  or  shall  be 
used  for  storing  or  keeping  of  hemp,  flax,  tallow,  pitch, 
tar,  turpentine,  rosin,  unslacked  lime,  saltpetre,  sulphur, 
gunpowder,  spirits  of  turpentine,  aqua-fortis,  spt.  nitri 
fortis,  oil  of  vitriol,  hay,  straw,  fodder  of  any  kind,  corn 
unthreshed,  oil,  wax,  or  distilled  spirits,  from  100  to  150 
cents,  in  proportion  as  the  situation  and  quality  of  such 
buildings  shall  render  them  more  or  less  hazardous,  in  the 
opinion  of  the  Directors. 

N.  B.  As  circumstances  may  exist,  which  will  either 
lessen  or  increase  the  hazards,  that  come  within  the  strict 
letter  of  the  foregoing  rates,  the  Company,  in  those  cases, 
reserve  the  right  to  fix  the  premiums  accordingly,  or  to  refuse 
to  make  the  insurance. 

VIII. 

Goods,  wares  and  merchandise  (except  those  before 
enumerated  hazardous),  and  household  furniture,  not  con- 
tained in  buildings  used  for  hazardous  occupations,  from  70 
to  100  cents,  according  to  the  rate  of  the  buildings  in 
which  they  are  contained,  for  sums  not  exceeding  OjOOO 
dollars,  with  an   increased  premium  upon  all  larger  sums. 

IX. 

Merchandise  deemed  hazardous,  contained  in  buildings 
used  for  hazardous  occupations,  or  otherwise,  from  100  to 
loO  cents. 


1797  A  Mutual  Company  was  proposed  in  Boston  and  a  care- 

fully   drawn    prospectus   was    issued  showing,    number  of 
dwelling  houses  in  Boston,  2,500;   number  of  stores   and 


132 


LECTURES  ON  FIRE  INSURANCE 


1810 


1819 


other  buildings,  2,000.  The  rates  for  premiums  or  assess- 
ments were  graded  from  35  cents  per  $100  to  -lO  cents  per 
$100,  with  a  "deposit"  in  each  case  of  four  times  this  net 
premium. 

Reference  was  made  to  similar  companies  in  New  York 
and  Norwich,  Conn.,  where  the  rates  quoted  averaged  30 
cents  per  $100  with  deposit  of  four  times  the  net  premium. 

Policy  fees  (additional)  were: — 
For  policies  less  than  $2,000        .  .  .     $1.00 

greater  than  $2,000  .  .        2.00 

For  each  endorsement  ....  .7-) 

Interesting  rates  on  early  policies  of  the  Hartford  Fire 
Insurance  Company  were:  Builders'  risk,  3  months,  12.] 
cents,  or  a  basis  of  50  cents  per  annum;  Gin  Distillery  at 
$1.25;  Dry  Goods  Stock,  75  cents;  Hardware  Stock,  25 
cents. 

The  wSalamander  Society  organized  in  New  York. 
Eight  companies  at  first,  grew  to  26  companies  in  1826. 


Early  Clas- 
sification of 
Risks. 


Company 
Co-operation. 


1846 


CLASSIFIED    RISKS 

(a)  Non-hazardous:    Household     furniture,    coffee,     flour, 

linen,  etc.,   rate    for    contents    5    cents  higher     than 

building. 
(/;)  Hazardous:   Chinaware,    plate   glass,    cotton    in  bales, 

etc.,  add  10  cents, 
(c)  Extra    hazardous,     apothecaries,     printers,    rag   stores, 

add   25  cents. 
{d)  Specially   hazardous:    Bakers,  gas    makers,  etc.,  extra 

rate  as  per  table  of  Minimum  Rates. 
There  was  some  form  of  tariff   rating   for  city  of   New 
York  from  this  time  on. 

A  meeting  of  representatives  of  fire  insurance  companies 
of  New  York,  Boston,  Providence,  Albany,  Hartford, 
Oswego,  Philadelphia  and  New  Jersey  was  held  in 
NewYork. 

Resolutions  were  adopted  setting  forth  that  an  advance  of 
premiums  was  necessary.  A  committee  was  appointed  to 
"ascertain  from  pa'^t  experience  the  rates  of  premium  re- 
quired to  meet  the  losses  and  yield  a  reasonable  compen- 
sation to  the  stockholders  for  the  hazard  of  capital." 


NOTES  ON  RATES  AND  RATE  MAKING  133 


At  a  later  meeting  this  committee  reported  for  an  increase 
of  income  and  recommended: — 

1.  The  rate  of  premium  charged  by  the  local  companies 
in  any  place  where  agencies  are  established X.o  be  the  lowest 
rate  charged  by  the  agents. 

2.  Where  rates  of  premium  have  not  been  established  the 
agents  are  instructed  to  meet  with  representatives  of  local 
companies  or  by  themselves,  on  or  before  the  loth  of  each 
month,  to  agree  upon  the  rates  to  be  charged  for  their  re- 
spective risks  which  are  to  terminate  during  the  succeeding 
month,  to  furnish  each  other  with  duplicate  lists  of  their 
several  risks  with  the  rates  of  premium  heretofore  charged 
and  the  new  rate  agreed  upon. 

Classes  of  hazards  and  rates  of  premium  in  the  Eastern, 
Northern  and  Middle  States:  — 

Dwelling,  brick  or  stone,  detached  100  ft.  .oO 

If  wooden  roof  and  gutters  .  .  .  .50 

Dwelling,  wood,  with  lightning  rod    ,  .  .50 

Dwelling,  wood,  without  lightning  rod         .  .60 

Charge  to  be  made  for  exposure: — 

If  chimney  stands  upon  beams,  charge  additional    .25 

If  occupied  as  store  and  dwelling  or  stores  only 

with  ordinary  merchandise  of  country  store,  add 

.25  to  foregoing. 

Taverns  and  hotels,  unexposed  .  1<^  to  1.50 

Dwellings  within  100  feet  of  other  dwellings         .85 

It  is  not  known  whether  or  not  the  report  was  adopted  or 
the  rates  observed. 

1850         Local  "boards  of  underwriters"  organized  by  companies 

1866     and  their  agents  in  many  cities. 

The  period  from  1835  (Great  Fire  in  New  York)  to  1866 
includes  the  beginning  of  effective  co-operation  among  the 
companies;  also  their  first  attempts  to  estimate  rates  by 
separating  risks  into  a  large  number  of  classes  and  keeping 
record  of  the  experience  of  each  class. 

The  National  Board  of  Underwriters  organized.      From   National 
this  date  rate-making  has  been  by  co-operative  effort  and   Board 
the  expense  of  the  work  has  been  shared  by  practically  all   Organized 
companies  wherever  not  prohibited  by  law. 


J34  LECTURES  ON  FIRE  INSURANCE 


The  National  Board  had  a  very  elaborate  plan  for  rate- 
making,  but  its  control  gradually  broke  down  and  in 
1878  it  abandoned  finally  any  attempt  to  regulate  rates. 

1866  At  Norwich,  Conn.,  was  organized  the  first   local  board 

in  New  England. 

1873  First  schedule  rating  in  St.  Louis.      Schedules  formally 

adopted  and  printed  in  1875. 

1881  Underwriters      Association      of      Middle      Department 

organized. 

1883  Underwriters  Association  of  New  York  State  organized. 

New  England  Insurance  Exchange  organized. 

1885  Boston  Board  of  Fire  Underwriters  organized. 

QUESTIONS 

1.  When  was  fire  insurance  first  proposed  in  England? 

2.  From  what  we  learn  of  the  practice  of  rate-making  about 
1846,  explain  why  rates  were  inconsistent  among  cities  having 
local  companies,  such  as  Worcester,  Norwich,  Hartford. 

3.  What  very  important  association  of  fire  insurance  com- 
panies was  organized  in  1866? 

■4.    Does  this  Association  have  anything  to  do  with  rates? 
5.    Date  and  place  of  first  schedule  rating  in  this  country? 

III. 
THE  PROBLEM 

The  problem  for  solution  by  the  maker  of  rates  for  fire  insur- 
ance is  to  estal:)lish  equitable  charges  for  the  insurance  of  indi\  idual 
risks;  /.  e.^  to  apportion  fairly  among  the  taxpayers  the  periodic 
assessment  necessary  to  replace  the  property  fire  waste  of  the  com- 
munity. 

The  work  of  the  assessor  of  town,  county  or  state  taxes  is  com- 
plicated by  many  conditions  which  require  knowledge,  ability, 
judgment  and  discretion,  but  it  is  simplicity  itself  as  compared  with 
the  problem  of  the  assessment  of  the  fire  tax,  which  starts  w  ith  the 
fire  loss  of  the  nation,  and  ends  with  the  sawdust  spittoon  in  the 
country  store. 

The  prol)lem  has  not  been  solved,  perhaps  it  will  nc\  er  lie 
solved,  but  the  only  right  way  to  discuss  it  is  to  point  out  and 
emphasize  the   ideal  conditions  toward  which  thoughtful  effort  has 


NOTES  ON  RATES  AND  RATE  MAKING  J35 


been,  is  and  always  will  be  directed,  and  to  consider  the  existent 
hindrances  and  obstacles  in  the  way  of  satisfactory  progress,  and 
the  possible  means  for  their  remo\al. 

In  the  earlier  days  of  ciyilization's  history  fire  insurance  was  a  Public  In- 
luxury,  a  speculation  by  both  insurers  and  insured,  and  it  had  not  tercst. 
taken  its  place  as  a  public  utility  and  economic  necessity.  Little 
attention,  therefore,  was  giyen  to  the  computation  of  equitable 
rates,  and  the  property  owners  by  themselyes,  or  by  their  represen- 
tatiyes  in  legislatiye  bodies,  were  not  disposed  to  criticise  closely  the 
charges  made  by  the  companies.  In  recent  years,  howeyer,  fire  in- 
surance has  become  such  a  pre-eminent  factor  in  the  financial 
economy  of  eyery  community  that  the  methods  of  those  who  con- 
duct the  business  are  scrutinized  more  and  more  closely  by  indiyid- 
uals  and  legislatures,  and  there  is  an  insistent  demand  that  the  hap- 
hazard transactions  of  the  past  be  supplanted  by  a  more  defensible 
scheme  of  operations. 

The  indiyidual  rates  are  the  tangible  point  of  attack,  as  indeed 
they  form  the  keystone  of  the  structure  ;  and  it  is  none  too  early  to 
giye   these  yital  details  the  study  and  attention  which  they  deserye. 

The  ultimate  object  of  rate-making  is  to  raise  by  the  current  y^^^  Object. 
taxation  of  physical  property  an  amount  of  money  sufficient  to  reim- 
burse owners  of  such  property  for  their  losses  by  fire,  to  pay  the 
expense  of  the  assessment,  collection  and  disbursement,  and  to  pro- 
vide a  bonus  or  profit  to  the  shareholders  of  fire  insurance  com- 
panies who  hold  the  funds  in  trust  and  whose  own  money  is 
interposed  as  a  buffer  to  lessen  the  shocks  of  great  conflagrations, 
and  as  a  reserve  to  draw  upon  in  the  event  of  inadequate  estimate. 
As  the  principal  one  of  these  objective  items  is  the  fire  loss,  and  as 
that  cannot  be  estimated  in  advance  with  any  approach  to  accuracy, 
it  is  evident  at  the  outset  that  these  reserved  funds  of  the  insurance 
companies  are  a  necessity  to  the  stability  of  the  scheme,  and  that 
their  owners  are  entitled  to  consideration  for  the  hazard  of  their  in- 
vestment. 

The  subject  for  assessment  or  taxation  is,  broadly  speaking,  all  ^hc  Subject, 
the  buildings  of  the  country  and  their  contents,  and  a  comparatively 
trifling  value  outside  of  buildings  (lumber,  etc.). 

For  public  revenue  taxation  purposes  there  are  comparatively   Comparison 
few  considerations.     Within  a  defined  area  the  assessment  is  affected   with  Public 
only  by  actual  values  of  property,  or  by  actual  income  or  produc-   Revenue 
tion,  and  is  pro  rata  with  those  and  is  levied  upon  and  paid   by  all. 

Fire  insurance  premiums  are  not  paid  by  all ;  great  values  of 


136 


LECTURES  ON  FIRE  INSURANCE 


The  Prin- 
ciple. 


Qualities  of 
Rates. 


Adequacy. 


property  of  state,  city,  town  and  private  ownership  are  not  a\ail- 
able  for  contribution  to  the  general  fund,  as  their  inchision  with  or 
exchision  from  the  application  of  fire  insurance  is  a  matter  of  choice 
with  their  owners. 

The  fire  tax  cannot  lie  collected  pro  rata  with  values  of  the 
property  taxes ;  except  where  conditions  of  co-insurance  or  average 
are  accepted  by  the  taxpayer,  by  no  means  a  general  condition. 

If  it  were  possible,  it  would  be  unfair,  unwise  and  against 
public  economic  policy  to  apportion  the  fire  rate  on  the  basis  of 
value,  earnings,  or  production  only.  The  actual  and  possible  bene- 
fits of  fire  insurance  to  the  individual  property  owners  vary  directly 
with  the  probability  of  loss  to  their  property  by  fire,  which  fact 
entitles  them  to  discriminating  rates,  Con\ersely,  the  discriminat- 
ing rate  offers  the  owner  an  inducement  to  lessen  the  probability  of 
fire  loss  to  his  property  by  improved  construction,  protection,  and 
other  safeguards. 

The  principle  of  fire  insurance  being  the  distributioti  of  fiie 
loss  so  that  it  will  be  a  bearable  burden,  it  follows  that  no  one  risk 
may  be  considered  by  itself  except  for  the  purpose  of  comparison, 
no  one  town  or  city  may  be  rated  regardless  of  other  towns  or  cities, 
no  one  state  may  stand  independent  of  other  states. 

Having  in   mind  the  foregoing  presentation  and  coming  to  the 
practical  questions   of   actual    rate-making,    it   appears    that    rates 
should  have  these  qualifications,  viz.  : 
(a)    Adequacy. 
(^)    Fairness, 
(c)    Consistency. 

Adeqiiacy ^  in  order  to  raise  enough  money  to  pa}'  losses,  neces- 
sary expenses  and  reasonable  profits. 

Fairness.  While  no  one  risk  and  no  one  group  of  risks  may 
be  considered  absolutely  by  itself,  it  is  possible  in  the  light  of  ex- 
perience to  estimate  and  grade  the  probability  of  fire  loss,  and  to 
throw  risks  into  groups  or  classes  corresponding  to  such  grading. 
Fairness  requires  that  all  risks  be  so  grt)uped  or  classified  that  each 
class  may  be  rated  on  a  basis  self-sustaining  under  normal  condi- 
tions;  i.  e.,  unless  overwhelming  conflagrations  make  losses  which 
require  temporary  help  from  all  classes. 

Co7isistency  requires  that  risks  of  equi\alent  construction, 
exposure,  occupancy  and  protection  shoidd  have  equal  rates. 

Of  the  three  necessar\- qualities,  adequacy  is  most  easily  achieved, 
if  we  consider  only  the  gross  returns.      Fire   insurance  companies 


NOTES  ON  RATES  AND  RATE  MAKING  137 


are  required  to  prepare  and  Hie  annual  statements  of  losses  and  ex- 
penses, and  it  is  comparatively  easy  to  tind  out  whether  or  not  the 
gross  premium  income  is  enough,  and  to  increase  it  if  necessary  by 
methods  which  have  the  one  desired  result,  if  no  other.  This  was 
exemplified  bv  the  temporarN'  rate  achance  which  followed  the  great 
loss  at  San  Francisco. 

To  be  defensible,  however,  the  adequacv  of  rates  can  be  con- 
sidered onlv  in  conjunction  with  the  second  quality  named. 

Fairness,  as  it  has  been  defined,  is  the  most  ditficidt  of  the  three   Fairness. 
considerations.      It  presupposes  : — • 

(a)  Knowledge  of  the  hre  hazard  (probability  or  chance  of 
fire)  and  of  the  loss  hazard  (probable  extent  of  damage  by  or  from 
fire)  from  which  to  group  or  classify  the  property. 

Examples.  The  ^re  hazard  of  a  cotton  mill  exceeds  greatly 
that  of  a  brewery. 

The  /oss  hazard  of  a  retail  mercantile  stock  is  more  than  that 
of  the  stock  of  a  manufacturing  plant. 

(<5)  Knowledge  of  the  insurance  loss  cost  of  the  risks  in  each 
class,  and  of  the  a^■erage  rate  on  which  the  loss  is  computed. 

Example.  The  loss  cost  of  insured  Metal  Working  Plants  may 
l)e  70%  at  an  average  annual  premium  rate  of  l'/^,. 

(c)    Knowledge  of  the  expense  ratio  of  each  class. 

Example.  Risks  protected  by  automatic  sprinklers,  custom- 
arily thrown  into  a  class  by  themsehes,  show  by  comparison  with 
risks  not  so  protected,  but  otherwise  similar,  a  very  low  loss  cost 
and  a  very  high  expense  of  luiderwriting. 

It  is  more  expensive  to  do  business  in  some  states  than  in 
others,  l:)ecause  of  statute  restrictions,  requirements,  or  taxation. 

Such  knowledge  can  be  acquired  only  from  statistical 
data,  if  it  is  to  be  reliable,  and  from  the  nature  of  the  case  the 
statistics  should  cover  the  experience  of  a  number  of  years. 

We  are  confronted  at  once  by  the  fact  that  such  valuable  and  Available 
needed  information  is  not  to  be  had.  It  is  true  that  most  fire  in-  Data, 
surance  companies  have  a  so-called  classification  record  of  their 
business,  but  it  is  not  possible  to  combine  these  separate  records, 
which  probably  in  no  case  include  apportionment  of  expense 
among  the  groups,  because  of  the  lack  of  uniformity  in  the  lim- 
itation of  classes,  and  in  the  methods  of  allotment  of  risks  among 
the  classes. 


138  LECTURES  ON  FIRE  INSURANCE 

For  example : — 

Company  A.  has  a  classification  of  100  groups. 

B.  has  a  classification  of  1,000  groups. 

C.  includes  Metal    Toy  and  Novelty  factories  in 

its  Metal  Worker  Class. 

D.  does  not. 

E.  includes  Rolling   Mills  in  the  Metal   Worker 

Class. 

F.  does  not. 

G.  includes    in   the    losses    of    this    class    Metal 

Working    risks   burned     from    exposure    of 
other  classes. 
H.  does  not. 
I.  classifies  celluloid   comb   factories  with   those 

making  combs  from  shell  or  horn. 
J.  places  them  on  the  Pyroxylin  Worker  Class, 
etc. 
The  value  of  the  classification  record  of  any  one  company  is 
impaired   because   it    represents   the   experience  of   but   one  com- 
pany in  one  agency   in  each    community.      The  combined   results 
of  all  companies  are  necessary  for  reliable  statistics. 

"The  crying  need  in  fire  insurance,  and  the  inevi- 
table next  step  in  the  evolution  of  the  industry,  must 
be  uniformity  in  the  classifications  maintained  by, 
and  an  annual  codification  of  the  combined  ex- 
perience of,  all  companies." — (A.   J^.  Dean.) 

Until  such  need  is  met  and  such  a  step  is  taken,  all  the  effort 
toward  making  fair  rates  must  be  based  upon  the  incomplete  and 
inconsistent  statistics  available,  supplemented  by  conferences  of 
experienced  students  of  the  problem  whose  personal  knowledge 
and  observation  enables  them  to  make  comparisons  and  selections 
of  classes  of  risks,  a  course  of  procedure  which  has  been  followed 
for  half  a  century  and  which  produces  results  that,  while  of  un- 
doubted value,  are  not  susceptible  of  the  defense  which  combined 
statistics  would  provide  in  the  event  of  investigation  by  interests 
outside  of  the  insurance  companies  themselves. 

We  should,  therefore,  not  only  take  advantage  of  all  the 
information  and  experience  which  can  be  obtained,  but  should 
always  aim  toward   the  ideal   condition,  a  com])ined  classification 


NOTES  ON  RATES  AND  RATE  MAKING  139 


record  in  the  control  of  a  competent  actuarial  system,  carried  out 
to  such  detail  as  the  designation  of  the  class  of  each  risk,  with 
its  rate  in  the  printed  tariff  of  rates. 

The  study  of  such  a  scheme  opens  up  a  variety  of  considera- 
tions both  theoretical  and  practical  which  lead  the  student  far 
beyond  the  elements  of  the  proposition,  and  it  is  expected  that  a 
continuation  of  this  lecture  course  will  offer  an  opportunity  for 
those  who  desire  and  who  are  sufficiently  prepared  to  discuss  its 
refinements  at  length. 

The  ideal  quality  of  fairness  merges  not  only  with  that  of 
adequacy,  but  also  with  that  of  consistency,  in  that  we  must 
recognize  the  differences  among  risks  in  a  single  group  or  class. 

The  definition  already  given  explains  itself.  It  is  an  abso-  Consistency, 
lute  necessity  to  the  scheme  of  rate-making  to  apportion  properly 
the  insurance  cost  among  the  property  owners.  There  must  be 
recognition  of  the  qualities  of  a  risk  which  make  it  more  or  less 
subject  to  fire  loss  than  its  neighbor  or  competitor  of  similar 
description.  This  was  attempted  at  the  very  beginning  of  the 
business  by  the  discrimination  in  the  rates  for  wooden  and  brick 
houses,  for  those  with  tile  or  thatch  roofs,  etc.,  and  has  been  always 
evident  in  the  promulgation  or  "proposals"  of  rates.  The  de- 
velopment of  the  idea  has  been  the  preparation  and  application  of 
rating  "schedules,"  which  differentiate  risks  by  comparisons 
more  or  less  elaborate.  These  are  a  most  important  feature  of  the 
rate-making  of  the  present,  and  will  be  treated  at  some  length  in 
a  subsequent  lecture  on  Schedules  and  Schedule  Rating.  At  this 
time  it  is  perhaps  enough  to  say  that  this  form  of  rating  brings 
the  quality  of  practical  consistency  of  rates  at  least  within  view, 
and  it  is  surelv  not  beyond  our  reach. 

Passing    from    the    essential    qualities    to    those    which     are  Flexibility  of 
desirable,  we  come  to  the  practical  question  of  how  to  follow  the   Rates, 
lawless  fluctuations  of  the   fire  loss  ratio,      VV^ith   these  requisites 
in  hand  for  fairness  and  consistency  we  should  be  prepared  to  dis- 
tribute the  normal  fire  cost  and   the  expense  of  the  business  in  a 
manner  above  criticism. 

But  when  the  abnormal  loss  occurs — the  Chicago,  Boston, 
Baltimore  or  San  Francisco  disaster  overwhelms  the  fire  insurance 
industry,  what  shall  be  done?  And  what  shall  we  do  with  the 
effect  of  the  minor  conflagrations?  Every  year  the  loss  ratio  of 
at  least  one  state  is  more  than  doubled  by  a  municipal  conflagra- 
tion. 


J40  LECTURES  ON  FIRE  INSURANCE 


No  one  city  can  bear  the  loss  resulting  from  a  sweeping 
conflagration  within  its  limits,  and  at  irregular  intervals  there  are 
such  tremendous  disasters  that  a  whole  state  cannot  recuperate 
without  help. 

(This  statement  is  based  upon  the  practical  assumption  that 
a  rate  advance  of  more  than  twenty-five  per  cent  is  unfair  load- 
ing-) 

So  we  may  expect  to  face  in  the  future  conditions  which 
require  contributions  from  fnany  localities  to  help  the  otte,  and 
from  solvent  classes  to  reinstate  the  bankrupt.  This  means  not 
only  a  close  and  critical  knowledge  of  results,  but  also  a  flexible 
rating-  system  adaptable  to  changing  conditions. 

For  the  solvency  and  protection  of  the  insurance  companies, 
the  collectors  and  distributors,  it  should  be  possible  to  (1)  in- 
crease temporarily  the  general  tax  throughout  the  country  imme- 
diately after  an  immense  conflagration;  (2)  to  shift  the  increase 
back  to  the  conflagration  areas  of  cities  of  all  states,  and  (o) 
thence  back  to  the  state  where  the  disaster  occurred. 

All  of  which  sounds  very  ideal,  but  it  is  only  partly  so,  and 
is  perhaps  wholly  practicable. 

The  flexible  rate  is  possible  by  the  same  means  used  by  the 
manufacturer  whose  productive  cost  varies  from  year  to  year  or 
from  season  to  season.  He  publishes  a  price  /ist,  and  then 
modifies  his  prices  by  discount  sheets. 

So  we  may  hope  to  make  standard  rates  based  upon  experi- 
ence and  built  up  by  schedules.  When  losses  pile  up  in  a  given 
class,  it  is  not  necessary  to  work  out  an  entire  new  schedule,  or 
to  change  the  standard  rates  at  all  (unless  the  losses  are  clearly  due 
to  novel  hazards),  and  if  experience  shows  that  the  standard  rate 
is  too  high,  we  need  not  reduce  charges,  nor  increase  credits  in 
the  schedule.  Treat  both  conditions  by  percentages  of  advance 
or  reduction^ — leaving  the  Standard  Rate — the  "list  price"  to 
be  worked  out  as  before. 

This  treatment  is  to-day  being  attempted  for  important 
classes  of  risks  in  the  East,  and  the  results  are  such  that  it  will 
without  doubt  be  extended  to  others  in  a  systematic  way  from 
year  to  year. 

COMPETITION  IN  RATES 

As  has  been  said  the  majority  of  the  fire  insurance  com- 
panies of  the  country  are  united  in  an  effort  to  make  and  maintain 


NOTES  ON  RATES  AND  RATE  MAKING       HI 


right  rates  for  the  business;  they  study  the  problem  seriously  and 
apply  their  knowledge  and  experience  for  the  benefit  of  the  pub- 
lic as  well  as  for  the  small  margin  of  profit  required  by  their 
members  or  shareholders.  Their  rates  educate  the  property 
owner  by  expressing  in  considerations  of  dollars  and  cents  the 
comparative  safety  of  different  kinds  of  buildings,  the  danger  of 
certain  manufacturing  processes,  the  value  of  public  fire  protec- 
tion, the  worth  or  worthlessness  of  so-called  protective  devices  or 
materials.  With  the  best  available  experience  and  information 
they  compute  their  rates  so  that  the  unfortunate  few  will  be  fur- 
nished stable  indemnity  by  reasonable  contributions  from  the 
fortunate  majority.  The  success  of  their  scheme  and  the  avoidance 
of  undue  burdens  of  rate  taxation  depend  upon  their  ability  to 
collect  premiums  far  and  wide,  in  fullest  realization  of  the  prin- 
ciple of  insurance.  Any  contraction  of  their  premium-producing 
field,  any  elimination  from  their  list  of  taxpayers  means  an 
undue  levy  upon  those  who  remain. 

This  may  be  considered   to   be  the  principal   economic  argu-    Tariff  vs. 
ment   against  the  practice  of  other  companies  who  select   risks  of   Non-Tariff 
a  single  class  or  of   several  classes,  and   by  refusing  to  co-operate   Companies, 
with  the  body  of  tariff  companies  remove  their  selected  risks  from 
the  reach  of  the  latter's  rating  system.      The  inequitable  result  is 
that   the    great    majority    of   policy    holders   always   pay  more  for 
insurance    in   tariff    companies   than    they  would   pay    if   no  risks 
were  insured  by  non-tariff  companies. 

For  example:  Assume  the  insurance  on  all  the  breweries  in 
New  England  to  be  $10,000,000.  Of  these  20'^  ^^'^  insured  in 
non-tariff  companies.  Losses  of  $500,000,  among  those  insured 
in  tariff  companies,  are  then  charged  for  the  purpose  of  estima- 
ting rates,  against  $8,000,000  m%),  whereas  if  a//  had  been 
included  in  the  computation  it  would  have  been  charged  against 
$10,000,000  {■)%),  resulting  in  a  25%  over-charge  in  the  rate. 

Similarly,  the  non-tariff  companies  do  not  share  the  expense 
of  rate-making,  although  they  profit  from  it,  and  this  makes  an 
excess  tax  on  those  who  pay  for  insurance  in  tariff  companies. 

The  obvious  conclusion  is  that  it  is  against  public  policy, 
and  inimical  to  the  welfare  of  the  majority  of  the  insuring  prop 
erty  owners  to  allow  rate  competition  among  fire  insurance  com- 
panies; /.  e.j  non-participation  in  rate-making  and  non-observance 
of  rates  properly  made. 


J42  LECTURES  ON  FIRE  INSURANCE 


QUESTIONS 

1.  What  is  the  problem  to  be  solved  by  the  fire  insurance 
rate-maker? 

2.  What  is  the  object  of  rates? 

3.  What  are  the  differences  between  public  revenue  tax 
assessment  and  fire  insurance  rate-making? 

4.  What  three  qualities  should  be  possessed  by  five  insurance 
rates  ? 

5.  Define  and  describe  each. 

6.  What  is  the  greatest  need  to  make  intelligent  and  fair 
rating  possible? 

7.  Specify  some  of  the  defects  of  present  day  companv  class- 
ification methods. 

8.  What  is  the  best  practical  way  to  make  rates  consistent? 

9.  \\"hy  is  competition  in  rates  not  for  the  public  welfare? 

IV. 
SCHEDULES  AND  SCHEDULE  RATING 

Definition  By   reference  to  the  definition  of   schedule   rates  and  to  fore- 

and  Explana- going  remarks   under  the   head  of   *"•  Consistency,"  it  will  be  noted 

^^°^'  that  schedule   rating  is  an  attempt  to  show  comparison  of  risks  by 

establishing  a  uniform   scale   or  measure  of  values  of  defects  and 

good  qualities,  and  by  the  application  of  such  a   measure  and  pro- 

mulgaticjn  of  the  resulting  rates.      The  scale  or  measure  is  known 

as  a  rating  ■■'  schedule  "  and  may  consist  of  few  or  many  items. 

Rating  The  shortest  schedule  no\\-  in  use  in  New  England  has  seventeen 

Schedules.        (17)    items,   while   the   most   elaborate,   the    Universal   Mercantile 

Schedvde,  has  with  its  occupancy  charges  3,400  items  and  fills  with 

its  accompanying  explanations  a  book  of  250  pages.      The  former 

is  perhaps  typical  of  those  schedules  which  are  prepared  for  use  in 

the   smaller  and   more    scattered  commimities,  while    the    latter    is 

restricted  for  practical  reasons  t(j  the  larger  cities. 

Such  schedules  as  the  L^ni\ersal  Mercantile  Schedule  and  the 
Dean  Analytical  System  will  not  be  discussed  in  the  present  course 
of  lectiu'es.  ])ut  will  be  reser\ed  ior  a  later  course,  when  they  may 
be  taken  iq)  by  more  achanced  students,  together  with  classification 
problems,  etc.  Our  attention  at  this  time  will  Ik-  confined  to  the 
brief  and  simple  forms  of  rating  schedules  prej^ared  for  mercantile 
risks  and  certain  classes  of  special  hazards. 

For  small  and  scattered  communities  the  simple  schedule  \\  ith 
few  items   is   desirable   because  of  the  comjiaratix  el\   small  expense 


NOTES  ON  RATES  AND  RATE  MAKING  143 


of  application.  The  more  items  in  a  schedule  the  more  numerous 
and  frequent  re-ratings  must  he  made  hecause  of  changes  in  con- 
struction, occupancy,  exposure,  etc.  ;  and  as  it  is  necessary  to  have 
the  application  and  computation  done  by  sur\evors  employed  by 
the  companies  it  is  desirable  to  keep  their  work  down  to  a  reason- 
able minimum.  Moreover,  the  application  of  the  simple  schedule 
does  not  require  such  a  degree  of  expertness  as  is  necessary  to 
handle  one  of  great  elaboration,  and  this  consideration  is  reflected 
in  the  expense.  Again,  the  shorter  schedules  are  more  acceptable 
to  the  companies'  agents  in  the  small  commimities,  because  gener- 
ally speaking  the  character  and  volume  of  their  business  does  not 
warrant  theni  in  making  the  exhaustive  study  which  is  necessarv 
for  the  complete  understanding  and  defense  of  a  complicated  rating 
scheme. 

The  schedule  of  the  17  items  just  referred  to  is  reprinted  here 
as  one  of  a  type  which  has  practical  use,  and  not  because  it  is  con- 
sidered to  have  exceptional  merit.  It  is  not  intended  at  this  time  to 
criticise  or  defend  its  pro^•isions. 

SCHEDULE 

SCHEDULE    OF    CHARGES    FOR    DEFICIENCIES 
Construction.      Brick — Stone — Frame. 

1.  Area x x stories= 

X X "      = 

X X "        = 

BLDG. 

2.  Standard  Risk       .......  .20 

3.  Frame     .........  ,20 

4.  Exposure  (see  below)      ...... 

5.  Roof.      Shingle  or  Mansartl  with  Wooden  Frame      .  .15 

6.  Skylights.      Other  than  Standard    ....  .10 

7.  Cornices.     Wooden,    boxed,    on     Brick,    Stone    or 

Frame  Buildings    ,  .  .  .  .  .  .  .10 

8.  Height.     For  each  story  over  four,  as  follows,  ^•iz.  : — 

For  five-story  building  charge         .          .          .          .  .15 

For  six-story  building  charge           .          .          .          .  .45 

For  seven-story  building  charge      ....  1.05 

9.  Area.     For  each  5,000  feet  or  fraction  thereof  over 

5,000  feet  on  all  floors  and  basements     .  .  .  .05 

(Buildings,  occupied  solely  for  offices  or  offices  and 
tenements,  make  no  charge  for  Area.) 


144  LECTURES  ON  FIRE  INSURANCE 


10.  IxTERiOR   FixiSH.      Other  than  Standard             .           .  ,10 

11.  Stairways.      Other  than  Standard   ....  .10 
(When  stairways  are  in  "  well  holes  "  make  the  charge 

for  "well  holes"  and  no  charge  for  Stairways.) 

12.  Well  Holes.      Other  than  Standard         .          .          ,  .15 
lo.     Elevators.      Other  than  Standard   ....  .20 

14.      Heat.      Other  than  .Standard lo 

1.').      Lighting.      Other  than  Standard       .          .          .          .  .10 
1(3.      Occupancy.      Each   mercantile    occupant,   o\  er  one, 

not  less  than            .......  .05 

Alanufacturing  or  mechanical  occupancy,  not  less  than  .25 

17.     Cleanliness,  lack  of,  not  less  than            .          .          .  .25 

Rate        .........      


STANDARD  MERCANTILE  BUILDING 

Walls.      Brick,  stone. 

Side  Walls.      Parapet  with  no  openings. 

Roof.     Metal,  slate  or  gravel. 

Skylights.  Glass  to  be  at  least  ^-inch  in  thickness,  or  pro- 
tected by  approved  wire  netting. 

Cornices.     Brick,  stone  or  metal. 

Height.  Not  over  four  stories  above  street  level ;  basement 
coming  3  feet  or  more  above  street  level  to  be  counted  as  a  storv. 

Area.      All  floors  and  basements  5,000  feet. 

Interior  Finish.  None  except  in  offices.  If  walls  or  ceil- 
ings be  lathed  and  plastered  or  sheathed,  same  must  be  "  stopped" 
at  each  floor  on  side  walls  and  partitions,  and  at  least  every  15  feet 
in  ceilings. 

Stairways.  Enclosed  or  shut  off  at  bottom  by  self-closing 
doors. 

Well  Holes  for  Light.  None  unless  covered  at  each  floor 
w  ith  glass  at  least  ^-inch  in  thickness. 

Elevator.  Enclosed  in  brick,  or  supplied  with  self-closing 
hatches. 

Heat.      Steam  or  hot  water.      Pipes  on  iron  brackets. 

Lighting.     Coal  gas  or  electricity. 

Occupancy.  One  mercantile  occupant,  offices,  and  tene- 
ments. No  manufacturing,  mechanical,  or  specially  hazardous 
occupants. 

Exposures.       (Frame.)       For    frame    Iniildings    exposed    by 


NOTES  ON  RATES  AND  RATE  MAKING  145 


frame  buildings,  the  followinj^  charges  shall  be  made  :  20  cents  for 
each  frame  building  within  80  feet,  and  10  cents  for  each  other 
frame  buildinsf  within  SO  feet. 


For  frame  buildings  exposed  by  brick  buildings,  the  same 
charge  shall  apply  as  for  frame  building  exposed  by  frame  building. 

Exposures.  (Brick. )  For  brick  buildings  exposed  by  frame 
buildings,  the  following  charges  shall  be  made  :  15  cents  for  each 
frame  building  within  30  feet,  and  10  cents  for  each  other  frame 
building  within  80  feet. 

For  brick  buildings  exposed  b}-  brick  buildings,  the  following 
charges  shall  be  made  :  10  cents  for  each  brick  building  \\ithin  80 
feet,  and  5  cents  for  each  other  brick  building  within  80  feet. 

When  there  is  at  least  a  50-foot  street,  there  shall  be  no  charge 
for  exposure  of  any  building  on  opposite  side  of  50-foot  street,  un- 
less the  exposing  building  is  a  special  hazard,  or  is  more  than  four 
(4)  stories  high. 

Shutters.  For  brick  building  thoroughly  fitted  with  ap- 
proved metal-co\ered  shutters,  or  having  blank  walls  on  exposed 
sides,  no  exposure  charge  shall  he  made. 


It  should  be  noted  first  that  this  schedule  is  prepared  for  rating 
protected  fiiercajitile  buihii)igs  onl}'.  The  base  rate  and  charges 
are  based  upon  the  assumption  that  eightv  per  cent  insurance  is 
guaranteed,  and  no  provision  is  made  for  flat  rates. 

Item  No.  2  provides  a  fixed  base  rate  for  a  "■  standard  "  risk 
and  accompanying  the  schedide  is  a  sheet  of  memoranda  showing 
the  requirements  of  the  term. 

Note:  For  the  longer  and  more  complete  schedules  the  base 
rate  is  itself  the  result  of  the  computation  of  a  sub-schedule,  which 
compares  city  with  city  as  to  topography,  fire  protection,  water 
supply,  fire  record,  etc.,  so  that  the  base  or  key  rate  differs  among 
the  cities  rated  by  their  application,  and  is  subject  to  change. 

This  sheet  also  provides  directions  for  computing  the  charge 
for  exposure  (item  4),  otherwise  the  application  of  the  items  is  self- 
explanatory. 

Note :     The  estimation  and  comparison  of  exposures  is  perhaps   Importance 
the  most  difficult   and   important  of  any  feature  of  a  schedule  for   of  Exposure 
rating  mercantile  property.     The  variations  of  exposures  are  infinite   Charge, 
in  number,  and  the  very  fact  that  the  greatest  fire  loss  of  the  coun- 


H6  LECTURES  ON  FIRE  INSURANCE 


try  e\erv  year  is  due  to  the  spread  of  fires  from  the  buildings  of 
their  origin,  should  make  this  particular  detail  of  schedule  prepara- 
tion a  subject  of  especial  interest  to  every  student. 

As  to  the  base  rate  and  several  charges  of  schedules  of  this 
order,  it  is  very  natural  to  ask  how  they  were   reached,   and  the 
answer  may  be  of  interest. 
Preparation  From  the  discussion  of  the  Problem  of  Fire  Rating  it  is  evi- 

of  Schedule,  dent  that  there  are  no  statistics  which  woidd  enable  us  to  establish 
the  actual  rate  required  for  a  "standard"  risk  as  it  is  here 
described,  nor  can  we  by  records  or  data  show  that  the  increase  of 
risk  due  to  the  substitution  of  frame  walls  for  brick  walls  is  worth 
20  cents,  or  that  a  shingle  roof  is  worth  15  cents,  or  that  any  other 
of  the  conditions  provided  for  is  exactlv  measured  by  the  charge 
which  it  carries.  Indeed  it  is  not  reasonable  to  expect  that  we 
shall  ever  have  in  our  possession  information  sufficient  for  such 
minute  differentiation  of  hazards.  It  is  not  possible  to  segregate  by 
statistics  the  effect  upon  the  fire  loss  of  such  minor  items  as  the 
interior  finish  of  a  building,  or  the  enclosure  of  a  stairway,  although 
undoubtedly  the  building  with  sheathed  interior  walls  and  partitions 
and  open  stairways  is  a  poorer  risk  than  another  without  wall  finish 
and  with  enclosures  of  stairways.  So  the  preparation  of  such  a 
schedule  is  by  comparison  and  combination  of  individual  and 
company  observation,  experience  and  opinions.  First  a  practical 
'•  standard"  is  agreed  upon.  By  a  practical  standard  is  meant  one 
which  does  not  contemplate  such  refinements  of  construction,  pro- 
tection, etc.,  as  would  be  out  of  the  question  in  the  kind  of  com- 
munitv  for  which  the  schedule  is  intended.  A  committee  of 
underwriters,  after  establishing  such  a  standard,  then  exchanges 
opinions  and  experiences  as  to  the  projier  rate  for  a  risk  of  this 
description.  These  opinions  are  based  upon  the  individual  experi- 
ence of  the  members  of  the  committee  and  upon  such  company 
classification  records  as  appear  to  be  of  value.  The  result  of  the  dis- 
cussion is  the  base  rate  for  the  schedule,  or  rate  of  the  "standard"  risk. 
Similarly  each  of  the  items  is  then  discussed,  and  finally  the 
charges  for  all  items  are  tentatively  established.  Then  there  are 
trial  applications  of  the  tentative  schedule,  from  which  it  may  be 
found  that  the  results  are  not  in  harmony  with  the  committee's 
combined  opinion  as  to  the  proper  rates  for  risks  to  which  the 
application  is  made.  This  necessitates  revision  until  at  last  the 
schedule  is  acceptable  and  ready  for  use,  when  it  is  printed  and 
applied. 


NOTES  ON  RATES  AND  RATE  MAKING  H7 

The  immediate  conclusion  after  hearing  of  the  "judgment"  or 
guess  method  of  making  the  schedule,  is  that  schedules  are  over- 
estimated and  are  not  the  exact  measures  of  risk  and  hazard  that 
they  are  advertised  to  be.  As  a  matter  of  fact  they  should  not  be 
advertised  as  exact  measures  of  risk  and  hazard,  because  it  is  not 
possible  for  us  to  prove  that  qualification  of  any  rate,  whether  made 
by  schedule  or  otherwise.  The  argument  for  the  schedule  and  its 
application  is  wholly  one  of  cottsistency. 

The  schedule  itself  should  be  considered  as  an  absolutelv  arbi-  Schedule  an 
trary  scale,  which  is,  howexer,  probably  equitable  in  the  general  Arbitrary- 
effect  of  its  application,  but  whose  great  value  lies  in  the  compari- 
son of  the  characteristics  and  conditions  of  the  risks  to  which  it  is 
applied.  .Schedule  rates  always  ha\c  the  defense  of  consistency, 
and  that  is  usually  enough  to  satisfv  anv  reasonable  critic.  The 
schedule  takes  the  four  items  of  the  fire  risk  ;  namely,  construction, 
occupancy,  exposure  and  protection ;  separates  each  into  few  or 
manv  constituent  parts  and  demonstrates  to  the  property  owner  that 
he  pavs  or  is  gi\en  credit  for  in  his  insurance  tax  the  actual  condi- 
tion of  his  own  propertv  and  is  not  undulv  affected  by  the  faults  or 
neglect  of  anvone  else. 

To  this  schedule  for  rating  mercantile  Iniildings  there  is  often  Occupancy 
annexed  an  arrangement  or  classification  of  *■'  occupancv  charges,"  Charges, 
which  enalile  the  surveyor  to  rate  the  different  kinds  of  contents 
with  discrimination.  The  contents  of  mercantile  buildings  are 
separated  into  three  or  more  classes,  principallv  because  of  their 
susceptibilitv  to  damage  by  fire,  smoke  or  water,  and  rates  are  made 
in  accordance  with  these  classifications.  These  rates  are  additional 
to  the  building  rate,  because  under  equivalent  conditions  of  protec- 
tion and  co-insurance  the  contents  of  the  building  will  suffer  a  far 
greater  loss  than  the  building  itself  by  a  fire  on  the  premises. 

For  example,  a  schedule  of  occupancy  charges  now  in  use  places 
in  Class  A.  (least  susceptible  to  loss)  hides,  office  furniture,  wool  in 
bales,  etc.  ;  in  Class  B.  grocery  stocks,  laundries,  libraries,  saloons, 
etc.  ;  and  in  Class  C.  stocks  of  butter,  cheese  and  eggs,  drugs,  gloves, 
musical  instruments,  etc.  A  feature  of  this  particular  schedule  of 
contents  charges  is  that  these  charges  additional  to  the  building- 
rates  diminish  gradually  as  the  building  rate  is  higher.  The  argu- 
ment for  this  is  that  the  susceptibilitv  to  damage  of  a  certain  class 
of  contents  is  not  wholly  relative  or  variable,  but  more  nearlv  fixed, 
while  the  varying  building  rates  indicate  not  only  greater  or  less 
susceptibility  of  the  buildings  to  damage,  but  also  the  hazard  of  a 


}48 


LECTURES  ON  FIRE  INSURANCE 


fire  oricrinating  and  spreading  in  or  to  the  building.      The  effect  of 
this  scheme  is  shown  by  the  following  example  : 

Building  Rate     .50      Contents  of  Class  A.  1%       B.  1.50     C.  2.00 

-      1.50  •'         "      '^      A.  1.85     B.  2.20     C.  2.60 

"  "     3.00  "         "      '•      A.  3.00     B.  8.15     C.  3.45 


Special 

Hazards 

Schedules. 


In  many  parts  of  the  country  there  are  now  in  use  schedules 
prepared  for  application  to  classes  of  risks  other  than  mercantile, 
and  it  is  probable  that  this  condition  will  develop  quite  rapidly  in 
the  near  future,  as  there  is  a  demand  on  the  part  of  legislatures  and 
insurance  departments  in  quite  a  number  of  states  for  schedule  rat- 
ing of  all  classes  of  risks,  with  the  requirement  that  copies  of  the 
schedules  in  use  shall  l)e  Hied  with  the  insurance  departments. 
These  schedules  have  some  degree  of  uniformity,  while  they  must 
necessarily  be  adapted  each  to  the  peculiar  conditions  and  hazards 
of  the  class  to  which  it  is  applied.  A  sample  form  of  Special 
Hazard  schedule  in  use  in  New  England  is  that  which  is  applied 
to  Boot  and  Shoe  Factories,  as  follows  : — 

SCHEDULE  OF  CHARGES 

BOOT  AND  SHOE  FACTORIES 

BASE  RATK 1.05 

Charge  for  Deficiencies. 

1.  Walls. 

Jf  more  than  one  third  frame 20 

2.  Area. 

For  each  1,000  square  feet  or  fraction  thereof  ground  area  over  5,000 
square  feet 05 

3.  Height. 

(a)  Tliree  stories 05 

(b)  Four  stories 10 

(If  more  than  five  stories  increase  the  charge  per  story.) 

4.  Roof. 

If  shingle,  board  or  mansard,  or  otherwise  unapproved   ...        .10 

5.  Cornice. 

If  wood  boxed  on  exposed  brick  building 05 

6.  Floors. 

(a)  If  double  board  instead  of  plank,  charge  for  each  story      .     .01 

(b)  If  otlierwise  not  standard,  charge  for  each  story  .        .        .     .03 

7.  Finish  (except  in  offices). 

(a)  Wood  finish,  or  finish  of  any  kind  which  leaves  concealed  spaces 

1.  On  walls 05 

2.  On  ceilings 02 

(b)  50  per  cent  of  charges  under  («)  to  be  added  for  each  story  more 

than  one  

8.  Stairways. 

(rt)  If  in  tower  but  not  standard,  or  if  in  building  but  enclosed  in 

plank,  not  less  than 02 

(6)  If  in  building  and  not  enclosed,  not  less  than 10 

To  carry  fonrard. 


NOTES  ON  RATES  AND  RATE  MAKING  149 


Brought  forward, 

9.  Elevators.  __        .,.    ,    .,^.  ,        ,       ,,    . 

(a)  If  in  tower  but  not  standard,  or  if  in  building  and  enclosed  but 

without  standard  hatches,  not  less  than 05 

(6)  If  in  building  and  open,  not  less  than     .        .        .        ...        .15 

(c)  If  floors  are  pierced  by  dumb  waiters,  chutes  or  large  belt  holes, 

not  less  than ^^ 

10.  Heating.  .   .  ^  , 

(a)  If  by  steam,  hot  water  or  blower  system,  piping  not  properly 

installed,  not  less  than 1^ 

(h)  Coal  stoves,  not  less  than 05 

(c)  Wood  stoves,  not  less  than 10 

(d)  Oil  stoves,  not  less  than  25 

11.  Lighting.  ,     ,     ,  ,-       <. 

(a)  If  by  electrical  equipment  not  standard,  charge  according  to 
circumstances 

(b)  If  by  kerosene  in  approved  metal  lamps,  not  less  than        .        .        .Oo 
(t)  If  bv  kerosene  not  in  approved  metal  lamps,  not  less  than  .        .10 

(d)  If  by  kerosene  in  central  draft  lamps,  not  less  than     .        .        .        .20 

(e)  If  by  gasolene  vapor  lamps  or  other  methods  not  mentioned, 
charge  according  to  Exchange  Rules 

(/)  If  by  gas,  brackets  not  standard,  not  less  than 05 

12.  Power. 

If  not  standard.    (Discretionary.) 

13.  Boilers  (for  power).  ,    .,j.  .       <.    a 

(a)  If  in  building,  or  in  adjoining  frame  building  not  cut  oit,   not 

If^ss  thf)u  •  ,..•••■••         .^o 

(6)  If  in  frame  building  cut  off  as  in  standard,  not  less  than    .        .        .05 

(c)  If  in  fire-proof  room  in  building,  or  outside  but  not  standard, 

not  less  than ^0 

14.  Boiler  Stack. 

(rt)  Metal  stack  through  roof  properly  ventilated,  not  less  than        .        .10 
(6)  Metal  stack  through  roof  not  properly  ventilated,  or  through 

any  floor,  not  less  than 25 

(c)  Brick  stack  in  building,  not  standard,  not  less  than     ...        .05 

15.  Chimneys. 

Which  can  be  used  other  than  standard,  not  less  than  .        .        .10 

(For  tile  and  similar  chimneys  charge  at  least  .50.) 

16.  Heating  Tools. 

(a)  By  metal  lamps,  boxes,  if  any,  to  be  metal,  not  less  than  .         .10 

\b)  By  oil  stoves,  glass  lamps  or  with  wooden  boxes,  not  less  than         .30 

17.  Heating  Devices  on  Stitching  or  Edge-finishing  machines. 

If  not  standard,  not  less  than 10 

18.  Pitching  Thread.     Not  on  machines.    Pitch  heated  by 

(a)  Gas  or  coal  stoves,  not  less  than 05 

(6)  Oil  stoves,  not  less  than 25 

19.  Watchman  or  Thermostats. 

If  no  watchman  with  approved  clock  or  no  approved  thermostat 

system -0 

20.  Waste  Cans. 

If  not  a  proper  supply  of  approved  pattern,  not  less  than  .        .         20 

21.  Oils,  Cements,  Benzine,  etc. 

If  not  as  in  requirements,  charge  according  to  hazard 

22.  Smoking. 

If  allowed,  except  in  office,  not  less  than 10 

23.  Cleanliness. 

If  not  as  in  standard,  charge  according  to  circumstances 

24.  Casks  and  Pails  or  Standpipes  and  Hose. 

If  not  as  in  standard,  not  less  than 15 

25.  Occupancy. 

(a)  Charge  for  each  occupant  more  than  one  using  power,  not  less 
than ,     -05 

(6)  Charge  for  each  other  occupant,  except  offices  and  dwellings, 

not  less  than 02 

To  carry  forward. 


J50  LECTURES  ON  HRE  INSURANCE 


^  Brought  forward, 

26.  General  Condition. 

If  not  good  charge  according  to  circutustances 

27.  ExposuKE. 

Charge  according  to  hazard 


28.  Exceptional  Bad  Features  not  noted  in  Schedule. 

Charge  according  to  circumstances 

Total      

Deduct  for 

29.  Exceptional  Good  Features  not  Noted  in  Schedule. 

Deduct  according  to  circumstances        ....... 

Total  for  figuring  percentages 

Deduct  fur 

30.  Fire  Department. 

If  as  in  standard,  3  per  cent  of  above  total   .... 

31.  Water  Supply. 

If  as  in  standard,  3  per  cent  of  above  total   .... 

32.  Fire  Alarm. 

If  as  in  standard,  2  per  cent  of  above  total  .... 

33.  If  Outside  Protection  is  Standard  in  all  Particulars 

(when   deduction   is  made  under  this  item,  make  none 
under  Nos.  30,  31  and  32),  10  per  cent  of  above  total 

34.  Fire  Protection. 

If  better  than  standard,  such  per  cent  of  above  total  as 
circumstances  merit  in  addition  to  the  10  per  cent 
under  No.  33. 

35.  Fire  Protection  (external,  public  or  private). 

Not  as  good  as  standard,  but  better  than  none,  according 
to  circumstances,  but  never  to  exceed  5  per  cent 

Total         

Final  Total  CFlat  Rate) 

Unprotected  Risks.  Flat  Rate. 

(These  are  risks  where  no  deduction  is  made 
under  any  item  from  No.  30  to  No.  35,  in- 
clusive.) 

Building  (Brick  or  Frame)  and  contents. 

(The  "Final  Total.") 

Protected  Risks.  Flat  Rate.  80  %  Rate 

(These  are  risks  where  a  deduction  is  made 
under  one  or  more  of  the  items  No.  30  to 
No.  35,  inclusive.) 

Note.— Rates  on  protected  risks,  both  build- 
ing and  contents,  are  subject  to  30  per  cent 
reduction  for  specific  policies  with  the  80 
per  cent  reduced  rate  clause. 

Building,   Brick 

(The  "  Final  Total,"  less  50  cents.) 

Contents 

(The  "  Final  Total  ") 

Building,  Frame 

(The  "  Final  Total,"  less  30  cents.) 

Contents 

(The  "  Final  Total.") 


NOTES  ON  RATES  AND  RATE  MAKING  151 


This  schedule  is  accompanied  by  standard  requirements,  as  in 
the  case  of  the  mercantile  schedule  to  which  reference  has  been 
made.  The  ordinary  standards  are  those  of  the  National  Fire  Pro- 
tection Association,  and  the  special  standards  are  peculiar  to  the 
classes.  For  example,  the  tiuantity  of  unused  rubber  cement  allow- 
able under  standard  conditions  is  one  day's  supply,  which  must  be 
removed  at  nioht  and  stored  at  least  10  feet  from  the  factory. 

This  schedule  was  prepared  for  application  to  unprotected  as 
well  as  protected  risks,  and  the  base  rate  and  charges  and  credits 
are  "  flat."  The  final  rates  resulting  from  its  application  are  sus- 
ceptible to  a  reduction,  according  to  New  England  practice,  of  30% 
for  the  contribution  conditit)n  in  the  policy  of  the  eighty  per  cent 
Reduced  Rate  clause. 

It  is  noteworthy  that  items  8,  9,  10,  12,  etc.,  permit  more  or 
less  elasticity  of  application,  a  minimum  limit  of  charge  being  fixed 
for  many  conditions.  The  alternative  of  this  provision  is  an  in- 
crease in  the  number  of  items,  objectionable  for  reasons  before 
stated. 

Items  Nos.  28  and  29.  which  allow  for  discretionary  allowances 
or  charges  for  conditions  not  contemplated  in  the  schedule,  seem 
to  be  necessary  in  all  schedules  of  wide  application.  In  the  classes 
for  which  they  are  prepared  there  are  freak  risks  and  unthought-o£ 
peculiarities,  good  as  well  as  bad,  for  which  allowance  must  be 
made  at  some  point  in  computing  the  rate. 

In  this  Special  Hazard  schedule  there  is  no  rule  for  figuring 
the  exposure  charge.  Such  a  rule  would  undoubtedly  enhance  the 
value  of  the  schedule,  liut  it  is  less  necessary  here  than  it  would  be 
in  a  Mercantile  schedule,  as  manufacturing  plants  generally  are  not 
subject  to  the  severity  of  exposure  and  congestion  which  often 
affects  mercantile  property. 

QUESTIONS 

1.  What  is  a  rating  schedide  ? 

2.  What  are  the  four  essential  features  of  a  risk  to  be  con- 
sidered in  its  rating.^ 

3.  What  are  the  two  types  of  mercantile  schedules?  Explain 
their  respective  advantages. 

4.  Explain  why  a  schedule  is  not  an  exact  measure  of  actual 
hazards. 

5.  What  in  vour  opinion  is  the  most  important  item  or  charge 
in  a  mercantile  schedule — and  why.^ 


152  LECTURES  ON  FIRE  INSURANCE 

6.  Apply  the  mercantile  schedule  quoted  to  some  risk  and  com- 
pare resvdts  (for  class  work). 

7.  Criticise  the  two  schedules  quoted. 

8.  What  are  occupancy  charges? 

9.  Classify  according  to  your  judgment  the  following  kinds  of 
mercantile  contents  in  3  classes,  A,  B  and  C,  class  A  to  have  the 
lowest  and  class  C  the  highest,  occupancy  charge. 

Dry  Goods.  Sporting  Goods. 

Paints  and  Oils.  Office  Furniture. 

Drugs.  Clothing, 

Fish.  Agricultural  Implements. 

Wool.  Sole  Leather. 

Liquors.  Groceries. 

Wall  Paper.  Candy. 

Millinery.  Furniture. 

Photographer.  Jewelry  in  Safes. 

Iron  Pipe.  Jewelry  Outside  of  Safes. 

CONCLUSION 

From  year  to  year  Fire  Insurance  Rate-making  is  approaching 
that  stage  of  development  which  will  entitle  it  to  the  dignity  of  a 
position  among  the  theoretical  and  applied  sciences.  What  has 
been  touched  upon  in  these  lectures  are  the  elements  or  bases  of 
both  theory  and  application.  They  merit  careful  study  and  discus- 
sion by  those  who  are  engaged  in  the  business  itself,  also  by  those 
whose  interest  is  the  economic  welfare  of  the  town,  city,  state  or 
country. 

With  a  well  grounded  knowledge  of  these  fundamental  prin- 
ciples it  is  to  be  hoped  that  we  may  enter  later  upon  a, course  of 
study  of  the  best  practical  methods  for  putting  these  principles  and 
theories  into  full  effect. 

BIBLIOGRAPHY 

Anon  :  Some  notes  on  associated  action  of  tire  insurance  companies 
doing  business  in  New  York  since  1819.  New  York  Under- 
writer, 20:  221,  255,  297,  336,  and  370. 

Bissell,  R.  M.  :  Rates  and  hazards.     Yale  lectures,  2  :  92. 

Brotherton,  H.  :  History  and  de\  elopment  of  the  Liverpool  Mer- 
cantile Tariff.  Journal  Insurance  Institute  Great  Britain,  12  : 
255. 

:   Variations   in    Hre   insurance  practice  and  rating  in  different 

localities.      Manchester  Association,  1907-OS,  (3-2S. 


NOTES  ON  RATES  AND  RATE  MAKING  153 

Dean,  A.  F.  :  Fire  ratinf^  as  a  science.     216-10  p.     Chicago,  1901. 

:  The  rationale  of  fire  rates.     241  p.      Chicago,  1901. 

:  Fire  hazard.    Is  it  measurable?    Pam.  43  p.    Chicago,  1910. 

:  Fire  insurance  classifications.     46  p.     Chicago,  1910. 

:  Analysis  in  fire  hazards.   Rough  Notes,  48  :  176, 177, 199, 201. 

Folger,  Herbert :  Is  the  rate  adequate  ?  Proceedings,  Fire  Under- 
writers Association  of  Pacific,  1904  :  48. 

Hardy,  E.  R.  :  The  making  of  fire  insurance  rates.  Typewritten 
MS.  of  address  before  Graduate  School  of  Business  Adminis- 
tration, Harvard  University,  1909. 

Hess,  Henry  E.  :  The  proper  assessment  of  fire  insurance  rates  in 
great  cities.      Standard,  Boston,  67  :  615  (Dec.  24,  1910). 

Hess,  H.  M.  :  An  analysis  of  the  Dean  system  of  fire  insurance 
rating.     Pam.  85  p.     Chicago,  1909. 

Jenny,  Charles  A.  :  Record  of  Fire  Insurance  by  States.  Published 
annually.     Underwriter  Printing  and  Pub.  Co.,  New  York. 

Laidlow,  J.  B.  :  Schedule  rating  for  mercantile  risks.  Proceedings 
Insurance  Institute  of  Toronto,  1901-02  :  43. 

Law,  Harrison  :  Premium  and  loss  tables.  Pub.  by  author,  Nutley, 
N.J.   Gives  data  by  companies  and  aggregates  for  series  of  years. 

:   Fire   insurance   expense   ratio   tables.      1908-1911.      Issued 

annually.  Gi^■es  for  a  series  of  years,  by  companies,  percentage 
of  premium  income  paid  for  losses,  commissions,  salaries  and 
taxes,  Nutley,  N.  J.      Pub.  by  author. 

Moore,  F.  C.  :  Standard  uni^ersal  schedule  for  rating  mercantile 
risks.  Pam.  New  York,  1902.  Also,  in  Fire  Insurance  and 
How  to  Build. 

National  Board  of  Fire  Underwriters  :  Statistical  tables  published 
in  annual  reports  of  proceedings.     New  York,  N.  Y. 

New  England  Insurance  Exchange  :  Local  agents  manual  of  rules 
and  forms.      152  p.      Boston,  1909. 

A\'alf()rd,  Cornelius  :  The  Insurance  cyclopedia.  In  4  vols.  Lon- 
don, 1874. 

Zartman,  Lester  W.  :  Discrimination  and  co-operation  in  fire  insur- 
ance rate  making.  In  Yale  Readings  in  Insurance,  Fire  In- 
surance.     New  Haven,  1902. 


PART  HI. 

FIRE  PROTECTION 

PUBLIC  AND  PRIVATE 
Excluding  Automatic  Sprinkler  Protection 


THEORY  OF  FIRE  PROTECTION   AND  CHEMISTRY 

OF  FIRE 

I. 

Fire  Protection,  as  the  name  implies,  is  protection  against 
fire  as  distinguished  from  fire  prevention,  and  may  be  divided 
into  three  distinct  branches: — 

1.  Discovery  of  fire. 

2.  Transmission  of  alarm. 

3.  Extinguishment. 

Under  the  heading  discovery  may  be  included  the  following: 
Watchmen  and  their  recording  devices;  police  or  other  outside 
persons;  thermostats  or  automatic  fire  alarms;  sprinkler  alarms, 
which  are  adjuncts  of  sprinkler  systems.  As  a  matter  of  fact  the 
majority  of  fires  are  discovered  by  persons  who  happen  to  be  in  a 
building  at  the  time,  such  as  employees,  tenants,  etc.,  but  for  fires 
starting  at  night  some  other  source  must  be  depended  upon  if  we 
are  to  have  anything  worthy  of  the  name  of  fire  protection.  Many 
fires  are  of  course  extinguished  by  the  persons  who  discover  them 
without  the  necessity  of  transmitting  any  alarm. 

Under  the  head  of  transmission  of  alarms  are  included  mu- 
nicipal electric  fire  alarm  systems,  telephones,  and  thermostat 
systems,  which  latter  act  in  the  dual  capacity  of  discovering  the 
fire  and  transmitting  the  alarm. 

Under  the  head  of  extinguishment  the  more  important  items 
are  pails,  chemical  extinguishers,  standpipes  and  hose,  public 
and  private  hydrants,  pumps,  waterworks,  tanks  and  cisterns,  fire 
departments,  fire  engines  and  sprinklers. 

The  common  methods  of  fire  extinguishment  may  be  summed  Theory  of 
up    in  one  sentence:   Put    on   water   as    soon    as  possible.      WhileFire  Ex- 
many   substances,  such   as    carbonic   acid   gas,  sand,  dry   powders ^'"S"*^"'"^"** 
and  steam,  are  occasionally  used  for  fire  extinguishment,  water   is 
the  one  most  universally  used  and  may  be  considered  the  standard 
material.      It  is  cheap,  plentiful  and  efficient.      Practically  all  fire 


J58  LECTURES  ON  FIRE  INSURANCE 


protection  devices  are  installed  with  the  idea  of  having  water 
where  it  will  be  needed  and  of  applying  it  as  soon  as  possible. 
The  swift  moving  fire  department  apparatus,  the  complicated 
fire  alarm  systems  and  automatic  alarms  are  constantly  being  im- 
proved so  as  to  give  more  speed,  thus  reducing  the  interval  be- 
tween discovery  and  application  of  water.  Waterworks  systems, 
pumps,  hose,  chemical  extinguishers  and  pails  are  all  installed 
for  the  purpose  of  getting  water  near  the  source  of  the  fire, 
wherever   it    may    occur. 

Probably  ninety-nine  per  cent  of  the  fires  that  start  can  be 
extinguished  at  some  stage  of  their  existence  with  a  pail  of 
water.  There  are  a  few  exceptions,  such  as  certain  electrical  fires, 
where  an  arc  is  instantly  created  that  is  hot  enough  to  melt  metal; 
fires  in  volatile  oils  where  the  flames  may  flash  over  the  sur- 
face almost  instantly;  flash  fires  in  dusty  places,  such  as  cellu- 
loid working  plants;  and  some  lightning  fires. 

It  is  therefore  safe  to  state  that  there  would  be  practically  no 
large  fires,  barring  those  of  incendiary  origin,  except  for  two 
reasons:  1,  That  there  is  no  pail  of  water  or  similar  extinguisher 
on  hand  when  the  fire  starts;  2,  That  there  is  no  one  on  hand  to 
use  it.  When  the  fire  in  the  State  Capitol  in  Albany  occurred  last 
year  it  was  said  by  someone  who  was  in  the  building  that  he 
could  have  put  it  out  with  a  pail  of  water.  But  he  did  not  have 
it,  and  as  a  result  thousands  of  dollars  worth  of  property  and 
priceless  records  were  destroyed. 

The  great  success  of  automatic  sprinklers  has  been  due  to 
the  fact  that  they  fulfill  both  of  these  functions:  that  of  placing 
water  wherever  it  will  be  needed  and  that  of  applying  it  without 
delay  when  the  occasion  arises. 

In  order  to  thoroughly  understand  the  theory  of  fire  protection 
it  is  well  to  consider  briefly  the  theory  of  fire. 
Definition  of  Fire  may   be    defined     as    the    combination    of   combustible 

Fire.  material   with    oxygen;  or   more    exactly,  the    oxidation    of   com- 

bustible material   at  a   temperature  above    ignition  point.      It  is  a 
chemical  action  and  results  in  the  production  of   heat  and  usually 
of  light.      Fire    is   usually,  but    not   necessarily,  accompanied   by 
flame. 
Combustible  Any  material    that  will  unite  with  oxygen  may  be  said   to  be 

Material.  combustible,  in  the  broad  sense.  Some  subtances,  however,  re- 
quire such  a  high  temperature  to  start  the  chemical  action  that 
they  are  practically  non-combustible. 


FIRE  PROTECTION  159 


Combustible  materials  may  be  divided  into  three  classes: — 

1.  Solids — like  wood. 

2.  Liquids — like  oil. 

3.  Gases — like  coal  gas. 

A  large  percentage  of  the  combustible  solids  are  of  organic 
origin.  There  are,  however,  a  number  of  metals  that  are  readily 
combustible,  such  as  magnesium.  In  the  form  of  a  thin  strip  this 
will  burn  very  readily  in  the  air,  giving  a  very  brilliant  light. 
Steel,  while  not  combustible  at  ordinary  temperatures  does,  how- 
ever, burn  at  very  high  .temperatures,  as  in  a  blast  furnace;  also 
in  a  finely  divided  state  at  lower  temperatures. 

Furthermore,  it  oxidizes  slowly  in  the  presence  of  moisture  at 
low  temperatures.  This  oxidation,  or  rusting  as  it  is  generally 
called,  goes  on  so  slowly  that  the  heat  formed  is  dissipated  and  no 
fire  ensues. 

Most  of  the  combustible  liquids  are  oils  and  burn  by  vaporiz- 
ing. Their  volatility  therefore  determines  the  ease  with  which 
they  are  ignited,  as  will  be  explained  later. 

There  are  many  combustible  gases,  and  these  unite  with  oxy- 
gen, or  burn  much  more  readily  than  do  solids  or  liquids.  When 
such  a  gas  is  mixed  with  air  in  the  right  proportion  the  combustion 
is  so  rapid  that  an  explosion  results. 

Oxygen  is  a  transparent  gas  and  is  one  of  the  elements, — that  Oxygen. 
is,  it  cannot  be  broken  up  into  other  substances.  It  is  found 
wherever  there  is  air,  for  the  atmosphere  is  composed  of  approxi- 
mately one-fifth  oxygen  and  four-tifths  nitrogen.  Oxygen,  as  has 
been  said,  is  necessary  to  support  combustion.  If  we  could  exclude 
the  air,  or  rather,  the  oxygen,  from  around  a  substance,  it  could 
not  burn. 

There  are  records  of  many  fires  that  have  burned  themselves 
out  for  lack  of  air.  In  a  small,  tightly  enclosed  room  it  is  not  at 
all  difiicult  to  arrange  a  fire  that  will  do  this.  The  elaborate  sys- 
tems of  draughts  in  stoves  and  furnaces  are  arranged  for  the  sole 
purpose  of  supplying  the  fire  with  the  proper  amount  of  air. 

This  fact  is  also  easily  shown  by  the  simple  experiment  of 
placing  a  burning  candle  in  a  small  tight  jar.  In  a  short  time  the 
oxygen  will  be  exhausted  and  the  candle  will  go  out. 

Flash  point  and  burning  point  are  terms  that  are  applied  to 
liquids  and  gases. 

Flash  point  of  a  liquid  may  be  defined  as  the  lowest  tempera-   Flash  and 
ture  at  which  it  will  give  off  vapor  rapidly  enough  to  cause  a  flash   Burning 
when  an  open  flame  is  applied.     The  flash  point  of  kerosene  oil  is   Points. 


J60  LECTURES  ON  FIRE  INSURANCE 


determined  by  law  in  many  localities  as  not  under  120°  F.  Below 
this  temperature  the  oil  is  free  from  vapor,  and  as  a  temperature  of 
120°  is  seldom  or  never  found  in  habitations,  kerosene  of  this  test 
is  of  course  comparatively  safe. 

Gasolene  has  a  flash  point  of  60  to  75°  F.  In  other  words,  it 
gives  off  inflammable  vapors  at  temperatures  below  normal,  and  is 
therefore  very  hazardous. 

Fuel  oil  flashes  at   .  .  .  .        91  to  122°  F. 

Engine  oil  flashes  at  .  .  .       320  to  392°  F. 

Burning  point  may  be  defined  as  the  lowest  temperature  at 
which  a  liquid  will  give  off  vapor  rapidly  enough  to  burn  continu- 
ously when  ignited.  The  burning  point  is  generally  a  little  above 
the  flash  point. 

Kerosene  has  a  burning  point  of         .  .       149°  F. 

Fuel  oil 128-58°  F. 

Raw  linseed  oil  ...  •  644°  F. 

Combustion  or  ig?iition  point  may  be  defined  as  the  tempera- 
ture at  which  a  substance  will  ignite.  This  is  usually  much  higher 
than  the  flash  or  burning  point,  and  applies  to  solids  and  gases  as 
well  as  to  liquids.  The  following  approximate  ignition  points  are 
of  interest  : — 

Phosphorus       ......       140°  F. 

Celluloid 300°  F. 

Sulphur 482°  F. 

Charcoal  ....  660°  to  1300°  F. 

Acetylene 900°  F. 

How  Fire  The  ordinary  action  in  starting  a  fire  is  to  create  heat  enough 

Spreads.  to  raise  some  substance  to  ignition  point.     In  striking  a  match  the 

friction  creates  enough  heat  to  ignite  the  sensitive  tip  and  the  flame 
is  then  transferred  to  the  match.  Fire  usually  spreads  in  this  way, 
that  is,  transferring  the  heat  of  one  burning  substance  to  another. 
In  lighting  a  piece  of  paper  the  heat  of  the  flame  in  the  match 
raises  a  corner  of  the  paper  to  ignition  point.  The  flame  at  this 
point  raises  a  neighboring  point  of  the  paper  to  ignition  point,  and 
so  it  goes  on. 

It  is  not  always  necessary  to  touch  the  article  to  the  flame, 
however,  but  frequently  it  can  be  ignited  by  holding  it  just  above 
the  flame. 

Fire  can  also  be  transmitted  by  hot  gases.  In  large  confla- 
grations, like  Baltimore,  large  quantities  of  gases  at  a  temperature 
above  the  ignition  point  of  wood  are  carried   ahead  of  the   flames 


FIRE  PROTECTION  I6J 


and  often  ignite  high  buildings  at  a  considerable  distance  away. 
Large  fires  are  also  spread  by  sparks  and  hot  embers,  but  this  is 
the  same  principle  as  the  one  first  mentioned. 

Fire  tends  to  spread  upwards  much  more  rapidly  than  to  the 
side  or  downward.  This  is  because  hot  air  and  hot  gases  are 
lighter  than  cold  ones  and  tend  to  rise.  The  fire,  therefore,  tends 
to  rise  and  ignite  substances  higher  up  unless  blown  to  one  side  by 
wind  or  draft. 

A  fire  starting  in  the  top  story  of  a  building  is  much  easier  to 
control — other  things  being  equal — than  one  starting  lower  down, 
although  the  difficulty  of  access  often  counteracts  this  feature.  A 
considerable  fire  can  occur  in  a  room  with  a  heavy  wood  floor  and 
ceiling  where  the  fire  damage  to  ceiling  will  be  very  heavy,  but 
that  to  the  floor  only  light.  This  fact  is  important  in  designing 
hazardous  rooms  like  picker  and  gauze  rooms,  where  it  is  very  de- 
sirable to  ha\e  the  walls  and  ceiling  as  nearly  fireproof  as  possible, 
while  the  floor  need  only  be  waterproof. 

This  is  also  important  in  considering  exposure  fires.  It  is 
seldom  necessary  to  put  shutters  on  basement  windows  to  protect 
them  against  exposures  more  than  10  ft.  away,  for  the  reason  that 
the  fire  and  heat  tend  to  rise  so  rapidly  that  at  this  distance  there  is 
little  danger  at  the  level  of  the  basement. 

Fla?ne  might  be  defined  as  the  visible  part  of  combustion.  Flame. 
There  can  be  combustion  without  flame,  but  not  flame  without 
combustion.  Flame  is  usually  due  to  the  gases  given  off  from 
combustible  materials.  Take  wood  for  example.  When  it  burns 
certain  gases  are  distilled  from  the  wood  which  unite  with  oxygen 
in  the  air  and  gi\e  the  luminous  effect  known  as  flame.  In  a 
similar  way  gas  is  distilled  from  coal  when  it  is  heated,  thus  form- 
ing ordinary  coal  gas.  In  gas  plants  this  gas  is  not  allowed  to  burn, 
liut  is  stored  and  distributed  through  pipes. 

In  a  large  fire  a  great  amount  of  gas  is  given  off,  causing  the 
flame  to  mount  high  above  the  seat  of  the  fire.  In  such  a  fire  it  is 
useless  to  pour  hose  streams  onto  the  upper  part  of  the  blaze,  for 
it  only  tends  to  extinguish  the  burning  gas  and  not  the  solid  material 
from  which  the  gas  is  being  distilled.  The  stream  should  be  di- 
rected at  the  seat  of  the  fire  and  should  be  large  enough  so  that  it 
can  reach  this  point  before  it  is  all  turned  to  steam. 

Charcoal  burns  practically  without  fiame  for  the  reason  that 
the  gases  have  previously  been  distifled  out.  When  a  log  burns  in 
an  open  fireplace  it  blazes  brightly  for  a  time,  but   finally  when  all 


}62 


LECTURES  ON  FIRE  INSURANCE 


Complete 
Combustion. 


Relative 
Combus- 
tibility. 


the  gases  have  been  dri\  en  off  and  burned  it  simply  glows,  as  there 
is  only  charcoal  then  left. 

Ileat  is  always  produced  bv  fire,  and  light  is  usually  produced. 
In  a  Bunsen  ])urner  or  alcohol  flame  there  is  little  light,  but  plenty 
of  heat,  as  is  shown  by  dropping  iron  dust  into  the  flame.  It  is 
heated  to  incandescence  and  burned.  On  the  other  hand  where 
there  is  light  there  is  usually  combustion,  but  not  always.  In  an 
incandescent  lamp,  the  filament  is  heated  to  incandescence  by  the 
electric  current,  but  it  is  not  burned,  else  it  would  not  last  for  any 
length  of  time.  In  a  Welsbach  light  the  mantle  is  heated  to  white 
heat  bv  the  gas  flame,  but  the  mantle  itself  does  not  burn. 

When  combustion  is  not  complete,  as  when  there  is  not  enough 
oxvgen  present  to  unite  with  all  the  gases  given  off,  then  smoke 
results.  Smoke  is  composed  of  unburned  particles  of  ihe  burning 
substance — usually  carbon.  When  combustion  is  complete  there  is 
no  smoke. 

In  a  large  fire  there  is  alwavs  smoke,  for  the  reason  that  oxy- 
gen from  the  air  cannot  penetrate  to  the  interior  of  the  blaze  so  as 
to  make  the  combustion  complete. 

In  a  railroad  engine,  part  of  the  smoke  is  caused  by  particles 
of  unburned  or  partially  burned  coal  being  forced  out  of  the  funnel 
In'  the  heavy  forced  draft.  This  is  not  strictly  smoke,  but  cin- 
ders. 

Substances  varv  greatly  in  relative  combustibility,  and  combus- 
tion varies  in  speed  and  intensity. 

Giinpoxvder  is  one  of  the  most  combustible  materials  and  burns 
so  rapidly  that  it  causes  an  explosion  if  confined.  This  is  due  to 
the  fact  that  there  is  enough  oxygen  in  the  ingredients  to  support 
combustion  without  regard  to  the  atmosphere,  and  also  to  the  very 
large  amount  of  gas  liberated  by  the  chemical  action.  If  in  a  con- 
fined space  this  rapid  release  of  gases  causes  an  explosion,  but  if 
not  confined  the  powder  simplv  burns  with  a  puff.  Gunpowder 
and  similar  substances  are  practically  impossible  to  extinguish  once 
thev  are  on  fire,  as  they  burn  too  rapidly.  It  is  evident,  therefore, 
that  gunpowder  is  an  extra  hazardous  substance. 

PJiosphoi-7is  is  not  only  verv  combustible  but  it  also  takes  fire 
at  very  low  temperatures.  The  ignition  point  is  about  60°  C,  or 
140°  F.  Pure  phosphorus  has  such  an  affinity  for  oxygen  that  it 
must  be  kept  under  some  liquid,  such  as  water.  Its  low  ignition 
point  is  what  makes  it  of  such  value  in  the  manufacture  of  matches. 
The  old-fashioned  match  head  was  composed  of  a  mixture  of  phos- 


FIRE  PROTECTION  163 


phorus  and  other  materials  placed  on  the  end  of  a  stick  previously 
dipped  in  sulphur.  When  the  match  is  rublied  on  a  rough  surface 
the  friction  thus  produced  causes  heat  enough  to  ignite  the  phos- 
phorus. The  flame  is  then  communicated  to  the  sulphur,  which 
takes  fire  more  readily  than  the  wood,  and  from  thence  to  the  wood 

itself. 

Celluloid  is  a  pyroxylin  compound  containing  cellulose  nitrate, 

camphor,  etc.  It  contains  a  large  amount  of  oxygen  and,  therefore, 
burns  very  rapidly  and  fiercely.  It  is  also  dithcult  to  extinguish, 
due  to  the  oxygen  present  and  in  part  to  the  fact  that  it  is  water- 
proof, so  that   the  water  runs  off  the  surface  instead  of  soaking  in. 

Gasolene  burns  very  rapidly,  due  largely  to  the  fact  that  it  is 
very  volatile  and  gives  off  an  inflammable  vapor  at  ordinary  temper- 
atures. It  is  also  very  difficult  to  extinguish,  due  in  part  to  the 
vapors  given  off  and  in  part  to  the  fact  that  it  is  lighter  than  water. 
When  water  is  applied  to  burning  gasolene  it  sinks  to  the  liottom 
and  simply  tends  to  spread  the  burning  oil. 

Alcohol  \s  less  inflammable  than  gasolene,  owing  to  the  fact  that 
it  is  less  volatile  and  also  because  it  is  about  the  same  density  as 
water.  When  water  is  thrown  on  burning  alcohol  it  mixes  with  it, 
thus  diluting  and  finally  extinguishing  it. 

Wood  is  perhaps  the  commonest  of  all  combustible  materials 
and  burns  with  a  flame.     It  takes  fire  at  al)out  1200°  F. 

Hard  Coal  is  one  of  the  least  combustible  of  the  materials 
used  as  fuel.  It  burns  slowly  and  has  to  be  placed  in  specially 
built  receptacles  with  a  good  draft  or  it  will  soon  go  out. 

There  are  two  principal  ways  of  extinguishing  a  fire  : —  Extinguish- 

1.  By  cooling.  ment  of  Fire. 

2.  By  excluding  the  air  or  oxygen. 

In  practice  these  methods  are  di^•ided  into  four. 

1.  ]?y    application    of    water    or    some    other    non-com- 
bustible liquid. 

2.  By  blowing — if  fire  is  not  too  large. 

3.  By  smothering,  as  wath  woolen   cloth  or  wet  blankets. 

4.  By   surrounding  the   substance  with  a  gas   containing 
little  or  no  oxygen. 

1.   Extinguishment  with  water. 

The  action  of  water  on  fire  is  twofold  : —  Water. 

a.  Cooling  it  below  ignition  point. 

b.  Covering  it  with  a  non-combustible  co\ering  that  ex- 
cludes the  air. 


164 


LECTURES  ON  FIRE  INSURANCE 


Water  has  a  very  high  specific  heat  which,  roughly  speaking, 
may  be  defined  as  the  amount  of  heat  a  substance  will  absorb  in 
raising  its  temperature  a  given  amount.  In  fact  a  given  weight  of 
water  possesses  a  greater  cooling  power  than  the  same  weight  of 
any  other  substance  at  the  same  temperature.  It  is  used  as  the 
standard  for  measuring  heat  and  the  thermal  unit,  or  unit  of  heat, 
called  a  calorie,  is  the  amoimt  of  heat  necessarv  to  raise  1  gramme 
of  water  through  1°  C. 
Specific  Calling  the  specific  heat  of  water  1  the   following  table   shows 

Heat,  the  specific  heat  of  certain  other  substances. 

Alcohol 0,62 

Turpentine  ......        0,43 

Glycerine  ..,.,,.        O.ob 

Glass 0,198 

Steel 0,118 

Brass 0,094 

Copper 0,094 

Lead 0,031 

On  account  of  its  high  specific  heat  water  is  one  of  the  best 
Extinguish-  fii'e  extinguishers  known.  This  is  fortimate,  as  it  is  the  material 
iog  Agents,  most  common  and  con\enient  to  use  in  nearlv  all  places.  Water, 
as  has  been  said,  extinguishes  a  fire  largely  by  cooling  it,  but  also 
by  covering  the  burning  substance  with  a  non-combustible  coat- 
ing that  excludes  the  air.  Heat  is  conducted  from  the  burning 
material  to  the  water,  thus  cooling  the  former  and  heating  the  latter. 

If  the  fire  is  big  enough  the  water  is  turned  to  steam  and 
driven  off  by  the  up  draft.  If,  howe\  er,  enough  water  is  ap- 
plied there  will  not  be  heat  enough  to  turn  it  all  to  steam  and  the 
temperature  will  finally  be  lowered  to  a  point  below  the  ignition 
point.  If  a  burning  substance  can  be  co\  ered  with  water  it  will  go 
out  for  want  of  oxvgen,  as  the  air  cannot  penetrate  the  coating  of 
water.  Waterproof  materials  are  more  difiicult  to  extinguish  than 
others,  for  the  reason  that  the  water  flows  off  and  d(K's  not  percep- 
tibly wet  the  surface. 

Salt  water  is  as  good  an  extinguisher  as  fresh  water,  but  is  not 
desirable  to  use  for  the  reason  that  it  causes  more  water  damage  ; 
that  is,  it  injures  materials  nearbv  that  are  not  burned.  It  also  has 
a  more  corrosi\  e  influence  on  pipes,  nozzles,  etc.  The  same 
applies  to  some  extent  to  chemical  streams. 

Other  non-combustible  liquids  are  occasionally  used  to  extin- 
guish fires,  but  as  a  rule  they  are  too  costly.  Cider  ami  milk  ha\e 
occasionally  l)een  used  in  the  country  when  water  was  nt)t  axailable. 


FIRE  PROTECTION  165 


Carbon  tetrachloride,  which  is  used  in  some  chemical  extin- 
o-uishers,  is  a  ^ood  extinguishing  agent,  but  is  rather  expensive. 

Sand  and  certain  dry  powders  are  used  as  extinguishing  agents 
and  have  practically  the  same  effect  as  water,  namely,  cooling  and 
smothering.  Thev  are  particularly  desirable  in  oil  fires,  where 
water  would  spread  the  blaze. 

2.  Extingnishttient  by  blowing. 

Small   fires,    like   burning   matches,  can   be  blown  out.      The   Blowing. 
action    here    is   one   of   cooling   and   dissipating   the  burning   gas. 
Blowing,  however,  tends  to  supply  more  oxygen  to  the  blaze,  and  in 
large  fires  tends  to  increase  rather  than  to  extinguish  the  blaze. 

3.  Extinguishment  by  smothering. 

Fires  if  not  too  large  can  be  smothered  by  covering  them  with   Smother- 
a    non-inflammable    or   not    readily    inflammable    covering.     Wet  ing. 
blankets  or  rugs  are  often  used  for  this  piu^pose,  and  a  small   blaze 
can  be  smothered  by  stamping  on  it.     The  action  in  either  case  is 
one  of  excluding  the  air  and  cooling  the  burning  substance. 

4.  Extinguishmetit  by  surrounding  ivith  gas  that  contains  no 

oxygen. 

Carbonic  acid  is  the  gas  most  used  to  extinguish  fires  by  Carbonic 
the  fourth  method.  The  principal  weakness  of  any  gas  as  an  ex-  Acid  Gas. 
tinguishing  agent  is  the  fact  that  it  cannot  readily  be  confined,  but 
is  easily  blown  away.  Most  chemical  extinguishers  utilize  this  gas 
in  part  as  an  extinguishing  agent,  as  will  be  described  later.  The 
action  of  carbonic  acid  gas  is  easily  shown  by  an  experiment. 
Place  a  burning  candle  in  a  glass  jar  about  six  inches  in  diameter, 
with  open  top.  Generate  carbonic  acid  gas  in  another  jar  by  the 
action  of  sulphuric  acid  on  bi-carbonate  of  soda.  Pour  this  heavy 
gas  into  the  first  jar  and  when  the  gas  reaches  the  le^■el  of  the 
candle  flame  it  \\ill  extinguish  it. 

Steam  is  also  sometimes  used,  especially  in  enclosed  dry  rooms. 

QUESTIONS 

1.  What  is  fire? 

2.  What  is  an  explosion? 

3.  What  is  the  flash  pcjint  of  a  liquid  and  how  is  it  determined? 

4.  What  is  ignition  point? 

5.  Explain  how  fires  spread. 


166  LECTURES  ON  FIRE  INSURANCE 

6.  What  is  flame  ? 

7.  How  is  smoke  formed? 

8.  State  the  four  principal  ways  of  extinguishing  a  fire. 

9.  Why  is  water  a  good  fire  extinguisher  and   how  does  it   ex- 
tinguish a  bhize? 

10.  State    what    other    materials    are    used    as    extinguishing 
agents. 

BIBLIOGRAPHY 

1.  Nuckolls,   A.  H.    Chemistry  of  Combustion.   American  School 

of  Correspondence,  Chicago. 

2.  Ingle,   Herbert.    Chemistry  of  Fire  and  Fire  Prevention. 

3.  Von  Schwartz,  Dr.       Fire  and  Explosion  Risks. 

2-PAILS  AND  CHEMICAL  EXTINGUISHERS 
Pails 

Old-fashioned  The  simplest  and  oldest  form  of  fire  protection  is  the  pail.      In 

Buckets.  the  days  of  our  grandfathers  this  and  the  hand  tub  were  practically 

the  only  forms  of  fire  protection  in  use.  In  those  days  the  pails  or 
buckets  were  generally  of  leather  carefully  painted  and  well  cared 
for.  The  name  of  the  owner  was  painted  on  the  side  and  they 
were  hung  in  a  conspicuous  place  in  every  well-regulated  house- 
hold. When  a  fire  occurred  a  bucket  brigade  was  formed  to  carry 
water  from  the  nearest  source  of  supply  to  the  burning  structure. 
Modern  Pails.  The  fire  pail  of  to-day  is  usually  galvanized  iron,  although  wood 

and  fibre  are  sometimes  used.  The  National  Fire  Protection  Asso- 
ciation has  promulgated  through  the  National  Board  of  Fire  Under- 
writers detailed  rules  for  the  construction  and  distribution  of  pails. 
These  specify  a  pail  of  from  10  to  14  quarts  capacity  built  of  heavy 
(No.  28  gage)  galvanized  iron  with  stout  handles  and  flat  or 
rounded  bottoms.  A  rounded  bottom  is  preferable  in  most  places, 
as  the  pail  is  less  liable  to  be  used  for  other  purposes.  It  has  one 
objection,  however.  If  a  pail  is  carried  in  each  hand,  the  round 
bottom  pail  cannot  readily  be  set  down,  wlfile  the  other  is  being 
used,  without  danger  of  upsetting. 

Pails  should  be  painted  red  with  llie  word  tire  in  black  letters 
2j^"  high  on  the  side. 


FIRE  PROTECTION  167 


The  number  required  varies  from  one  to  every  200  square  feet  Number  Re- 
to  one  to  every  400  square  feet.      Tlie  National  Board  rule  reads   quired, 
as  follows  : — 

Number  and  Arrangement :  To  be  placed  as  required  by  the  Under- 
writers having  jurisdiction,  not  less  than  one  dozen  to  every  5,000  ft.  floor 
area,  and  to  be  hung  on  hooks  or  set  on  shelves  arranged  so  that  bottom  of 
pail  shall  be  not  less  than  2  feet  or  top  of  pail  more  than  5  feet  from  floor. 
Where  other  than  flat  bottom  pails  are  used,  the  holes  cut  in  shelves  shall  be 
only  large  enough  to  receive  the  oval,  the  flanges  to  rest  on  top  of  the  shelf. 

Three  pails  and  one  filled  cask  of  at  least  60  gallons  capacity  or  one  ap- 
proved portable  extinguisher  and  C  pails  to  be  considered  the  equivalent  of 
12  pails. 

Note — In  all  cases,  there  must  be  at  least  half  the  number  of  pails  on  each  floor  as 
required  by  the  rule  of  12  to  each  ,o,000  square  feet  floor  area,  /.  e.,  only  one-half  of  the  pails 
required  on  each  floor  can  be  rt-placed  by  one  or  more  chemical  extinguishers. 

Pails  should  be  kept  full  by  weekly  inspection  and  the  water   Care. 
occasionally  changed. 

If  casks  are  used  they  should  be  covered  with  an  easily  removed 
cover  and  8  empty  pails  located  on  a  shelf  close  to  each  cask. 


Chemical   Exting;uishers 

These  may  be  divided  into  ti\  e  general  classes  : —  Classes. 

1.  Dr}'  Powder. 

2.  Liquid  extinguishers  without  pressure. 

3.  Liquid  extinguishers  under  constant  pressure. 

4.  Liquid  extinguishers    where  pressure  is  created    by   hand 

pump. 

5.  Liquiil  extinguishers  where  pressure  is  created  by  chemical 

action. 

1.  Dry  Powder.  These  are  usually  in  the  form  of  tubes  Dry  Powder. 
about  20"  long  and  2"  in  diameter.  They  contain  a  powder  largely 
composed  of  bicarbonate  of  soda  with  the  addition  of  oxide  of  iron, 
silica  and  other  materials.  As  an  extinguishing  agent  they  are 
seldom  any  better  than  so  much  sand,  but  their  highly  decorated 
enclosures  and  lurid  advertisements  are  apt  to  mislead  the  uninitiated. 

They  are  supposed  to  gi\e  ott,  when  heated,  a  gas  that  will 
assist  in  the  extinguishment  of  tire,  but  it  is  not  belie\ed  that  this 
feature  is  of  much  value.  The  powder  is  apt  to  cake  and  at  best  it 
is  dithcult  to  distril:)ute  effectively  over  a  hre. 


J68  LECTURES  ON  FIRE  INSURANCE 


Mr.  John  R.  Freeman  made  a  careful  investigation  of  dry 
powder  extinguisliers  as  a  result  of  the  Iroquois  Theatre  disaster. 
He  says  "dry  powder  extinguishers  should  never  be  used  to  gi\  e  a 
false  sense  of  security  about  the  stage  of  a  theatre."  He  gives  the 
chemical  composition  of  about  a  dozen  makes,  listed  at  from  $1.00 
to  $3.00  a  tube.  He  estimates  the  cost  of  the  ingredients  at  about 
6  cents,  making  a  total  cost  per  tube  of  not  OAer  15  cents. 

The  Committee  on  De\  ices  and  Materials  of  the  National  Fire 
Protection  Association  reported  in  19Ul  that  in  its  opinion  "all 
forms  of  dry  powder  fire  extinguishers  are  inferior  for  general  use — 
and  their  introduction  should  not  be  encouraged." 

Any  one  who  desires  an  extinguisher  of  this  type  can  make  it 
at  a  small  fraction  of  the  price  usually  charged. 

2.   Liquid   Extiiiguishers  without     Pressure.     Under  this 
head  are  included  hand  grenades,  chemical  pails,  and  a  few  extin- 
guishers of  the  sealed  tube  type. 
HandGre-  HAND  GRENADES.     These  were  a  popular  form  of  fire 

nadcs.  extinguisher  a  generation  ago,  but  have  now  nearly  gone  out^of  use. 

They  consist  of  a  spherical  bottle  holding  about  one  quart  and  filled 
with  a  solution  of  common  salt  or  sal-ammoniac,  to  which  is  some- 
times added  chloride  of  calcium  to  prevent  freezing.  They  are 
tightly  corked,  thus  preventing  evaporation,  and  this  is  perhaps 
their  onlv  desirable  feature.  They  are  supposed  to  be  thrown  onto 
a  blaze  and  to  break  when  they  strike,  thus  distributing  the  fire  ex- 
tinguishing liquid.  An  expert  can  gi\  e  a  very  clever  demonstra- 
tion with  them  under  conditions  of  his  own  makin;4.  but  for  or- 
dinary use  they  are  worth  almost  nothing. 

They  are  too  small  to  be  effective  in  anything  but  an  incipient 
fire,  and  do  not  always  break  when  desired.  The  chemical  feature, 
as  mav  be  said  of  most  devices  of  this  general  character,  is  of  \e\\ 
little  value.  Thev  are  little  if  any  better  than  a  bottle  of  water  of 
the  same  size,  and  cost  many  times  as  much. 
Chemical  A   number  of   chemical  pails   ha\  e   been   put  on  the  market. 

Pails.  among-st  them  being  the  following  : — 

WORCESTER  FAIL.     A  glass  pail  protected  by  a  tin  jacket 
and  sealed  by  a  soft  tinfoil  cover  under  the  loose  tin  co\er. 

MEYERS   PAIL.      An  enamelled  galvanized   iron  pail  scaled 
with  waterproof  paper. 

MILLER  PAIL.      A  Japannetl  metal  pail  with  a  self-o])ening 
and  closing  hinged  lid. 


FIRE  PROTECTION 


169 


WAGGONER  SANITARY  FIRE 
BUCKET.  This  is  a  metal  pail  of  12 
quarts  capacity.  It  has  a  conical  shaped 
cover  sealed  liy  a  wax  joint.  The  coni- 
cal shaped  top  prevents  the  entire  con- 
tents from  being  emptied  at  one  swing. 
It  contains  a  non-freezing  chemical 
solution. 

The  above  pails  should  only  be 
considered  the  equivalent  of  water  pails, 
and  while  they  prevent  evaporation 
thev  are  expensive  and  comparatively 
complicated. 


Waggoner  Chemical  Pail 
FIRE  TANKS  WITH  PAILS  INSIDE.  These  consist  of 
metal  barrels  holding  25  or  40  gallons.  They  contain  six  metal  pails, 
which  fit  into  each  other,  with  weighted  handles  so  arranged  that 
when  the  upper  pail  is  lifted  out  the  handle  on  the  pail  below  will 
swing  into  an  upright  position.  13y  this  method  the  pails  are  all 
full  and  ready  to  use  without  delay.  The  whole  tank  is  fitted  with 
a  hinged  metal  co\'er  closing  on  a  rubber  ring,  thus  making  a  prac- 
tically air  tight  joint  and  pre\  enting  e\apoi-ation. 


Safety  Tank,  Sectional  \'ie\v, 
Showing  Pails 


Safety  Tank  Closed 


170 


LECTURES  ON  FIRE  INSURANCE 


Tubes. 


Chemicals 
Used. 


Constant 
Pressure 
Liquid  Ex- 
tinguishers. 


Pump  or 

Syringe 

Type. 


The  tank  is  tilled  with  a  special  chemical  solution  which  is  sup- 
posed to  be  a  better  tire  extinguisher  than  water  and  which  will 
withstand  a  lower  temperature.  It  is  ad\ertised  to  withstand  a 
temperature  of  25°  below  zero.  This  de\ice  can  be  recommended 
as  a  very  desirable  substitute  for  ordinar\-  pails.  It  is  popular  in 
department  stores  and  other  places  where  ordinary  pails  mit^ht  be 
considered  unsightly.  They  are  made  by  A.  G.  Rowe,  New  York, 
and  the  vSafety  Fire  Extinguisher  Company  in  New  York,  and  cost 
$1()  to  $1S. 

^VORLD.  This  in  an  extinguisher  of  the  tube  type  consists  of 
a  metal  tube  holding  about  a  quart.  Arranged  to  operate  by  hand  or 
automatically.      Made  in  New  Ha\en,  Conn. 

FIRE-S-CO.  A  metal  cylindrical  tube  of  one  quart  capacity 
Contains  a  secret  liquid  said  to  withstand  a  temperature  of  6U° 
below  zero.  Has  perforated  cap.  Made  by  The  Firesco  Manfg. 
Co.,  Bridgeport,  Conn. 

The  above  extinguishers  contain  chemical  solutions  varying 
somewhat  in  consistency  but  usually  containing  some  of  the  fol- 
lowing materials  :  bicarbonate  of  soda,  hydrochlorate  of  ammonia, 
hyposulphite  of  soda  and  other  salts  that  are  supposed  to  gi\  e  off 
ammonia  or  carbonic  acid  gas  when  heated.  These  chemicals  are 
of  some  value  in  pre\enting  freezing  but  in  gei;eral  the  value  of  the 
extinguishers  for  lire  extinguishment  may  be  said  to  be  due  to  the 
liquid  they  contain  rather  than  to  any  chemical  feature. 

3.  Liquids  7i)nier  constant  pressure. 

Extinguishers  of  this  tvpe  are  generally  copper  cylinders  con- 
taining 1  to  3  gallons  of  some  chemical  solution  under  a  pressure 
of  from  2.5  to  150  pounds.  The  principal  objection  to  this  type  of 
de\  ice  is  that  the  pressure  is  pretty  sure  to  leak  out  in  course  of 
years  and  often  without  being  noticed. 

The  following  makes  are  perhaps  the  most  common  : — 
Miller. 
Bridgeport. 

Carbonic  Chemical   Fire  Extinguisher. 
Eclipse. 
This  type  is  rapidly  going  out  of  use  and  is  not  recommended. 

4.  Liquid  extinguishers  -where  pressure  is  created  by  hand . 

These  are  usually  of  the  piston  or  syringe  type.  The  Hcjuid  is 
forced  out  of  a  small  opening  by  pushing  on  a  piston  connected  by 
a  rod  to  a  handle. 


FIRE  PROTECTION 


171 


The   Little  Giant  is   of  this  type.      It  is  a  small   extino;uisher  Little  Giant, 
holding  only  a   quart.      The   piston  is  soldered   into  the   case  and 
must  be  broken  loose  by  a  blow  or  a  sharp  twist  of  the  handle.      On 
account  of  the  uncertainty  of  action   and  small  capacity  this  de\ice 
is  not  recommended.  Pyrenc. 

Pyrene  extinguisher  has  a  capacity  of  one  quart.  The  liquid 
consists  of  carbon  tetrachloride  charged  with  carbonic  acid  gas  to 
the  point  of  saturation,  also  a  small  quantity  of  ammonia  gas  and 
hydrochloric  acid.  This  solution  is  practically  non-freezing.  Both 
carbon  tetrachloride  and  carbonic  acid  gas  are  good  fire  extinguish- 
ing agents.  In  its  improved  form  with  brass  case  it  has  been  ap- 
proved by  the  Underwriters'  Laboratories.     It  is  too  small  to  be  of 


Pyrene  Extinguisher 


Pyrene  Extinguisher,  Sectional 
View,  Showing  ^'alves,  etc. 


J  72 


LECTURES  ON  FIRE  INSURANCE 


\  alue  in  any  hut  incipient  fires,  but  can  be  recommended  in  places 
^vhere  oils  or  calcium  carbide  is  stored  and  in  garages  and  automo- 
biles. 

5.  Extinguishers  where  pressure  is  generated  by  chemical  action. 

Three-gallon  A  number  of  patterns  of  extinguishers  have  been  made  that 

Upset  Ex-        come  under  this  head,  but  they  have  now  mostly  gone  off  the  mar- 

tinguisher.       \^q^  f^j-  private  use  except  the  standard  type  of  loose  stopper  2^4 

gallon  upset  extinguisher. 

They  practically  all  use  a  solution  of  bicarbonate  of  soda  and 
sulphuric  acid,  which  when  mixed  generates  carbonic  acid  gas 
giving  the  necessarv  pressure  to  propel  the  stream. 


Gravity    Stopper 
Upset  Extinguisher 

Sectional  View, 

Showing    Machine 

in  Operation 


In  the  2)'^  gallon  size  about  Xy^  H^s.  of  bicarbonate  of  soda  is 
dissolved  in  2_^  gallons  of  water  and  placed  in  the  extinguisher. 
About  4  oz.  of  sulphuric  acid  is  placed  in  a  bottle  and  arrange- 
ments made  to  liberate  this  in  the  soda  solution  when  desired.  In 
the  appro\ed  types  this  acid  is  usually  placed  in  an  S  oz.  bottle 
with  a  loose  stopper  of  porcelain  or  lead.  The  bottle  is  held  in  a 
cage  suspended  from  the  cap  or  from  the  sides  of  the  extinguisher. 
The  stopper  can  moxe  in  guides  a  sliort  distance.  When  the 
extinguisher  is  iinerted  the  stopper   falls  awav   from  the  bottle  and 


FIRE  PROTECTION  173 


the  acid  flows  into  the  soUition.  In  the  types  where  this  feed  is 
made  reasonably  slowly  there  is  a  distinct  advanta<^e,  as  a  sudden 
development  of  a  high  pressure  is  prevented  and  the  stream  lasts 
longer  and  is  niore  e\en  in  pressure.  The  pressure  is  apt  to  run  up  to 
about  100  lbs.  as  a  maximum  at  ordinary  temperatures  and  the 
stream  will  be  carried  30  to  50  feet. 

The  extinguishers  built  under  the  rules  of  the  Underwriters' 
Laboratories  have  a  shell  of  copper,  with  joints  well  made  and  tested 
to  350  lbs.  The  interior  is  coated  with  lead  or  solder  to  prevent 
corrosion.  The  outlet  is  ]'2"  located  near  the  top  and  screwed  with 
wire  netting.  The  hose  is  of  best  quality,  3  ply,  with  lead 
nozzle,  of  ]/%"  to  -^^"  inside  diameter.  Practicallv  all  manufacturers 
making  appro\  ed  goods  now  have  the  label  ser\'ice,  so  that  it  is  only 
necessary  to  call  for  labelled  goods  in  order  to  get  a  machine  that 
can  be  relied  upon  in  every  respect. 

The  chemical  action  is  as  follows  : — 

H,S04  +  2HNaCO-i  =  •2CO,>  +  Na.,S04  +  2H,.0 

H2SO4  is  sulphuric  acid,  ^HNaCOg  is  bicarbonate  of  soda, 
CO2  is  carbonic  acid  gas  and  NaavSOi  is  sulphate  of  soda,  some- 
times known  as  Glaubers  ,Salts.  The  latter  remains  dissolved  in  the 
solution  and  is  supposed  to  be  of  some  value  in  extinguishing  a  fire. 
While  wood  coated  \\ix\\  this  salt  does  not  burn  as  readily  as  un- 
coated  wood,  it  is  not  pro]:)able  that  it  has  much  effect  ^^  hen  applied 
as  is  done  in  case  of  a  chemical  extinguisher. 

The  principal  cause  of  deterioration  in  chemical  extinguishers  E^terioration. 
using  sulphuric  acid  is  the  absorption  of  water  by  the  acid.  The 
bicarbonate  of  soda,  if  thoroughly  dissolved  in  the  water,  should 
last  almost  indefinitely  if  the  acid  is  not  allowed  to  get  into  it.  Sul- 
phuric acid  is  hydroscopic,  that  is,  it  tends  to  absorb  moisture  from 
the  air.  If  not  tightly  corked  a  bottle  of  this  acid  will  in  course  of 
time  absorb  enough  moisture  to  overflow.  For  this  reason  it  was 
thought  necessary  to  seal  up  the  acid  in  most  of  the  older  types  of 
machines.  No  method  that  is  entirely  safe  and  satisfactory  has, 
however,  been  found  for  doing  this,  and  the  extinguishers  now  ap- 
proved practically  all  use  a  bottle  with  a  loose  stopper. 

For  this  reason  an  extinguisher  will  deteriorate  slowly,  and  the 
rules  require  that  it  be  recharged  once  a  year  and  the  date  of  re- 
charge placed  on  a  tag  attached  to  the  handle.  As  a  matter  of  fact, 
it  would  probably  take  five  or  six  years  under  ordinary  conditions 
for  an  acid  bottle  half  full  of  acid  to  o\erfiow,  but  the  limit  of  one 
year  is  on  the  safe  side  and  should  be  strictly  li\ed  up  to. 


J74 


LECTURES  ON  FIRE  INSURANCE 


Another  very  important  reastjn  for  recharginor  every  year  is 
that  when  sulphuric  acid  becomes  dihited  a  certain  amount,  so 
that  its  density  is  about  63  degrees  ]5eaume,  it  will  freeze  at  the 
high  temperature  of  46  degrees  F.  Such  an  extinguisher  is  liable 
to  be  crippled  by  freezing  of  the  acid  when  not  expected. 
How  Before  charging,  the  extinguisher  should  be  carefully  rinsed 

Charged.  out,  as  any  free  acid  might  cause  corrosion.  It  is  well  to  use  warm 
water  for  the  solution  as  the  soda  will  dissolve  in  this  much  more 
readily.  Care  should  be  taken  to  stir  the  contents  until  all  the  soda 
is  dissolved. 

There    are    about    25    extinguishers    of  the   2^'^    gallon    loose 
stopper  type  now  approved  by  the  National  Board  of  Fire  Under- 
writers   and    these    will    be    found    in    the     list    of    approved    fire 
appliances  issued  semi-annually. 
Principal  '^^^^  Underwriter  is  one  of  the  oldest  upset  extinguishers  of  the 

Makes.  apprcn-ed  loose  stopper  type.      It  is  made  in  Boston  by  Knight  & 

Thomas,  who  did  a  great  deal  to  de\elop  extinguishers  along  ap- 
proved lines.  The  acid  is  fed  slowh'  into  the  solution  by  means  of 
a  patented  cup  shaped  stopper. 


Acid  Bottle  in  the  "  Uiuiervvriter "  Chemical  Extinguisher.  Fig.  i  shows 
Bottle  in  Cage  attached  to  Cap.  C  is  the  Porcelain  Stopper.  Fig.  2  shows 
Bottle  in  the  inverted  position.  The  acid  then  feeds  slowly  into  solution 
through  the  cup-shaped  Stopper.     Fig.  3  shows  the  Stopper. 


nRE  PROTECTION  J75 


There  are  se\eral  makes  of  extinguishers  that  are  not  appro\  ed, 
but  which  are  still  found  in  use  to  considerable  extent  and  which 
may  warrant  a  short  description, 

Babcock.  The  older  txtinguishers  of  this  make  were  of  the 
break-bottle  type,  and  this  type  is  still  being  made  for  fire  depart- 
ment use.  The  acid  is  contained  in  a  small  bottle  tightly  corked 
with  a  rubber  cork.  There  is  a  ring  near  the  lower  part  of  the 
bottle  that  is  not  as  strong  as  the  other  parts  of  the  glass.  To 
operate,  a  spindle  is  screwed  down  onto  the  top  of  the  bottle,  thus 
breaking  it  and  liberating  the  acid. 

Any  machine  of  this  type  is  undesirable,  for  the  following  rea- 
sons :  It  is  uncertain  in  action,  as  the  bottle  does  not  always  break 
easily  ;  it  liberates  the  acid  suddenly,  thus  creating  a  heavy  pressure 
for  a  short  time  ;  the  broken  glass  is  apt  to  clog  the  outlet ;  it  is  too 
complicated  for  anyone  to  operate  easily  unless  they  have  been  pre- 
viously instructed.  Most  of  the  explosions  of  chemical  extinguishers 
have  occurred  in  the  break-liottle  type. 

The  later  types  of  Babcock  extinguishers  are  mostly  of  the 
gravity  stopper  upset  type. 

Buffalo.     A  gravity  stopper  upset  machine  using  no  hose. 

Carr.  A  glass-lined  extinguisher  with  the  acid  in  a  small 
hermeticallv  sealed  bulb  cemented  into  the  upper  part  oi  the  ma- 
chine. This  bulb  is  broken  by  a  blow  on  a  piston  which  extends 
through  the  cap. 

Edviands.  The  acid  is  placed  in  a  four-ounce  bottle  so  bal- 
anced that  it  tends  to  upset  when  released.  A  glass  and  rubber 
stopper  is  inserted  in  the  bottle  and  held  by  a  rod  passing  through 
the  cap.  When  the  rod  is  turned  the  stopper  is  withdrawn  and 
the  bottle  upsets, 

Harnden.  A  gra\itv  stopper  upset  machine  made  in  three 
and  five  gallon  sizes. 

Hero.  An  upset  machine  having  a  bottle  w  ith  a  lead  stopper 
that  works  on  a  hinge. 

HoUo~vay.     A  break-bottle  machine. 

PhcEnix.  An  upset  machine  with  a  hard  rubber  stopper 
pressed  against  the  top  of  the  acid  bottle  by  means  of  a  rod  extend- 
ing through  the  cap.  When  the  rod  is  given  a  quarter  turn  the 
stopper  is  released  and  the  extinguisher  is  then  inverted. 

Rex.  This  is  an  upset  machine  with  the  acid  in  a  specially 
designed  bottle.  The  bottle  has  a  long  neck  in  which  is  placed  a 
rubber  co\ered  lead  ball  of   somewhat   less  diameter.      The  ball  is 


176 


LECTURES  ON  FIRE  INSURANCE 


prevented  frt)m  falliiiL;-  into  the  acid  by  a  contraction  in  the  base  of 
the  neck  and  the  top  of  the  neck  is  sealed  with  a  thin  piece  of  mica 
held  in  place  by  a  hollow  cap.  This  seals  the  acid  and  prevents  it 
from  absorbing  moisture.  When  the  extinguisher  is  inverted  the 
lead  ball  breaks  the  mica  cap  and  releases  the  acid. 

Steinpcl.  An  upset  machine  containing  a  large  flat  bottle  and 
a  heavy  ball.  When  it  is  inverted  the  ball  is  supposed  to  fall  onto 
the  bottle  and  break  it. 

Star.  Machine  containing  an  in\crted  bottle  with  a  glass 
stopper.  The  stopper  is  attached  to  a  rod  extending  through  the 
cap  and  is  removed  from  the  bottle  by  turning  the  rod. 

There  are  two  other  modern  extinguishers  which  should  be 
mentioned. 

The  Arctic  made  by  the  American  La  France  Co.  This  con- 
tains a  non-freezing  solution  of  chloride  of  calcium  and  a  large 
capsule  filled  with  liquefied  carbonic  acid 
gas.  The  capsule,  which  is  placed  in  the 
top  of  the  device,  has  a  soft  metal  seal 
which  can  be  punctured  by  pushing  down 
a  sharp  pointed  piston.  This  liberates 
the  carbonic  acid  gas  and  furnishes  power 
to  propel  the  stream.  It  is  not  approved 
by  the  Laboratories. 

^liuimax.  A  conical  shaped  ex- 
tinguisher of  the  break-bottle  type.  It 
has  no  hose,  but  the  stream  comes  out  of 
the  pointed  end  and  can  be  casilv  directed. 
The  acid  is  in  a  sealed  glass  tube  which  is 
broken  bv  a  plunger.  It  is  approved  by 
the  Underwriters'  Laboratories. 


Ext 
guishers. 


Value  and  I'^     general,    approxed    extinguishers 

Limitations  can  be  considered  a  \ery  desirable  form 
of  Chemical  Qf  flj-g  protection  in  places  where  there  are 
people  who  know  how  to  use  them.  This 
is  not  always  the  case  in  mills  having  low 
grade  help,  and  for  this  reason  it  is  always 
desirable  to  ha\e  some  water  pails  in 
addition  to  the  extinguishers.  Simple 
as  they  are,  few  people  can  handle 
them    to    ''ood    a(l\anta<''e    the    first    time 


Minimax   Extinguisher 


FIRE  PROTECTION  J77 


they  try,  and  it  is  very  desirable  to  ha\e  the  persons  who  are 
Hable  to  use  them  drilled  occasionally  in  their  use.  For  dwelling 
houses  they  are  an  ideal  form  of  protection  if  this  precaution  is 
taken.  Recharge  them  once  a  year  and  let  your  wife,  child  or  maid 
discharge  them  so  as  to  gain  the  confidence  necessary  for  good  re- 
sults. 

The  great  value  of  this  ft)rm  of  extinguisher  is  that  it  will  give 
a  good  stream  of  liquid  lasting  for  about  a  minute  that  can  be  used 
readily  upon  ceilings,  curtains  and  hollow  walls  where  pails  would 
be  hard  to  use.  The  chemical  action  is  not  usually  important  im- 
less  the  fire  is  in  a  concealed  space  where  the  carbonic  acid  gas  wdll 
be  confined  or  in  a  can  of  burning  oil  where  the  gas  will  settle  on 
the  surface.  It  is  the  stream  of  liquid  rather  than  anv  chemical 
properties  it  may  possess  that  is  of  greatest  importance. 

Great  care  should  be  taken  to  prevent  a  chemical  extinguisher  Care  of 
from  freezing.     A  machine  may  be  weakened  in  this  way  without  Chemical  Ex- 
the  defect  being  noticed.      Under  these  conditions  they  are  liable  to  tinguishers. 
explode  when  used.      A  number  of  persons  have  been  killed  in  this 
way  and  in  nearly  all  cases  it  is  probable  that  the  extinguisher  had 
been  previously  weakened  by  freezing  or  hard  usage. 

There  is  no  way  to  inspect  a  chemical  extinguisher  thoroughly  Inspection, 
without  discharging  it  and  seeing  that  it  is  properlv  recharged. 
However,  a  fairly  good  idea  of  its  condition  may  be  had  by  un- 
screwing the  cap  and  seeing  that  the  acid  and  bottle  are  in  good 
condition  and  that  the  soda  has  been  properlv  dissolved  in  the 
water. 

Large  Chemicals.  Chemical  tanks  of  from  25-60  gallons  Large 
mounted  on  wheels  are  being  used  to  a  limited  extent.  They  are  Chemicals. 
mostly  of  the  upset  type  containing  a  solution  of  bi-carbonate  of  soda 
and  with  acid  bottle  somewdiat  similar  to  the  2^4  gallon  size.  The 
only  type  approved  by  the  National  Board  is  of  the  33  gallon  size. 
It  is  a  hea^'y  cylinder  mounted  on  two  wheels  and  equipped  with 
100  feet  of  ^"  hose. 

A  desirable  form  of  large  extinguisher  is  the  double  cylinder 
type,  where  one  cylinder  can  be  recharged  while  the  other  is  being 
used.  The  larger  sizes  mounted  on  four  wdieels  are  very  exten- 
sively used  by  fire  departments,  and  will  be  described  under  that 
heading. 

Stationary  Chemical  Extinguishers.  These  are  but  little  Stationary- 
used  in  this  part  of  the  country,  although  there  are  Laboratory  Chemicals. 
rules  for  their    construction.      In  a   general   way   they   consist    of 


J78 


LECTURES  OiN  FIRE  INSURANCE 


Upset  33-Gal.  Chemical  Extinguisher 

large  tanks  of  from  250  to  500  gallons  capacity,  permanently  lo- 
cated in  the  lower  part  of  the  building.  A  permanent  1}(  or  I14" 
standpipe  runs  from  the  tank  to  hose  connections  on  each  floor. 
The  tank  contains  a  solution  of  bi-carbonate  of  soda  and  a  lead  re- 
ceptacle for  sulphuric  acid.  In  some  types  the  tank  is  turned  over 
on  a  horizontal  axis  by  a  releasing  device  operated  from  each  floor. 
In  other  types  the  acid  receptacle  is  upset  by  a  similar  device.  This 
releasing  device  is  usually  in  the  form  of  a  flexible  cord.  In  one  of 
the  recent  types  the  cylinder  is  immo\  able,  but  the  acid  receptacle 
is  inverted  by  change  in  pressure.  This  is  accomplished  bv  pump- 
ing an  excess  pressure  into  the  standpipe,  which  is  released  when  a 
hose  valve  is  opened. 

Non-freezing  N^on-frcezing    coiiipon/ids.      There     are     several    compounds 

Compounds,   that  have  been  used  to  pre\  ent  freezing  of  chemical   extinguishers, 
the  more  important  ones  being  as  follows  :  — 


FIRE  PROTECTION  J79 


Common  salt^  or  sodium  chloride,  can  be  used  either  in  pails 
or  chemical  extinguishers,  but  will  only  lower  the  freezing  point  to 
0°  F.  under  the  most  fa\"orable  conditions.  A  10%  solution  lowers 
the  freezing  point  to  19°,  and  a  20^^  solution  to  7°  F. 

Glycerine  can  be  used  in  chemical  extinguishers  or  pails.  A. 
mixture  of  3^/2  lbs.  per  gallon  lowers  the  freezing  point  to  10°  F. 
and  hy^  lbs.  per  gallon  to — 10°  F.  It  is  expensive  and  not  entirely 
satisfactory. 

Denatured  alcohol  is  suitable  for  automobile  radiators,  but 
should  not  be  used  to  any  extent  for  fire  protection  on  account  of 
its  combustible  nature. 

Calcium  chloride  is  cheap  and  well  suited  for  use  in  pails  and 
casks,  but  cannot  be  used  in  chemical  extinguishers  on  account  of 
its  chemical  action.  The  following  table  gives  the  amount  neces- 
sarv  to  withstand  certain  temperatures  : 

1  lb.  per  gallon 27°  F. 

18°  F. 


1°    F. 

-18°  F. 
-40°  F. 


4  "      "        " 

5  ^'      ''        " 
Probably  the  best  method  of  caring  for  chemical  extinguishers 

in  cold  places  is  to  build  frostproof  closets  for  them.  These  can 
be  built  of  double  boards  with  dead  air  space  between  so  as  to  give 
ver}'  good  protection. 

QUESTIONS 

1.  Describe  a  standard  tire  pail. 

2.  What  are  the  five  principal  classes  of  chemical  extinguishers 
on  the  market? 

3.  In  what  class  of  fires  is  the  Fyrene  Extinguisher  especially 
desirable,  and  why? 

4.  Describe   an   approved   2^4    gallon    upset    chemical    extin- 
guisher. 

6.   \Vhat  is  the  chemical  action  in  extinguishers  of  this   class? 

6.  Describe  the  method  of  chai'ging  a  2^/^  gallon  upset  chemi- 
cal extinguisher. 

7.  How  shovdd  such  a  de\ice  be  cared  for  and  used? 

8.  How  often  should  extinguishers  of  this  class  be  recharged, 
and  whv? 

9.  Describe  briefly  a  stationarv  chemical  extinguisher. 

10.  What  can  be  used  to  prevent  freezing  in  fire  pails? 


(80 


LECTURES  ON  FIRE  INSURANCE 


Size  and 
Location  of 
Standpipe. 


BIBLIOGRAPHY 

1.  Rules  of  the  National  Board  of  Fire  Underwriters  for  pails 
and  chemical  extinguishers. 

•2.  Crosby-Fiske  Handbook,  Ed.  1909,  p.  188. 

3.  Freeman,  John  R.     The  Safeguarding  of  Life  in  Theatres. 

4.  Robinson,  J.  A.  Freezing  preventatives  for  water  pails  and 
chemical   extinguishers,  N.  F.  P.  A.  Quarterly,  January,  1912. 

5.  N.  Y.  Fire  Insurance  Exchange  Rules  for  Chemical  Ex- 
tinguishers, Insurance  Engineering,  June,  1905,  p.  594. 

6.  C.  A.  Hexamer,  Nat.  Fire  Protec.  Assoc.  Proceedings, 
Vol.  2,  p.  31. 

7.  Committee  Report  Nat.  Fire  Protec.  Assoc.  Proceedings, 
Vol.  6,  p.  214. 

S.  Committee  Report  Nat.  Fire  Protec.  Assoc.  Proceedings, 
Vol.  10,  p.  232. 

9.  Committee  Report  Nat.  Fire  Protec.  Assoc.  Proceedings, 
Vol.  11,  p.  407. 

3-STANDPIPES  AND  HOSE:  METERS 
Standpipe  and  Hose 

Standpipe  and  hose  is  a  very  valuable  form  of  tire  protection 
if  properly  installed  and  cared  for.  The  installation  includes  the 
proper  size  of  hose  and  standpipe,  the  correct  location,  and  a  water 
supply  of  adequate  volume  and  pressure.  Maintenance  includes 
the  proper  care  of  hose  and  equipment,  the  upkeep  of  the  water 
supply  and  the  proper  instruction  of  persons  as  to  the  use  of  the 
apparatus. 

The  standpipe  should  be  of  suificient  size  to  give  a  good  stream 
from  more  than  one  outlet  at  once  without  too  much  friction  loss. 
It  is  seldom  desirable  to  use  pipes  less  than  2"  or  more  than  4"  in 
diameter.  Larger  sizes  are  apt  to  waste  too  much  water  if  they  are 
broken,  as  frequently  happens  during  a  fire,  and  smaller  sizes  cause 
too  much  friction  loss. 

They  should  be  located  in  conspicuous  places  and  near  enough 
together  so  that  100  feet  lengths  of  hose  will  reach  e\  ery  point  in 
the  building.  They  should  not,  therefore,  be  located  much  nxcr  200 
feet  apart,  and  somewhat  closer  where  partitions  interfere.  .Shorter 
lengths  of  hose,  namely,  50  to  75  feet,  are  desirable,  as  they  are 
easier  to  handle  and  less  liable  to  kink.  If  these  are  used  the  stand- 
pipes  should  be  placed  at  a  corresponding  distance  apart. 


FIRE  PROTECTION 


m 


Where  public  water  is  available  this  is  usually  the  best  supply.  Water 
If  not,  tanks  or  reservoirs  can  be  used.  The  pressure  on  the  top  Supply, 
floor  should  be  at  least  25  lbs.  for  good  protection.  A  pressure 
tank  giving  75  lbs.  pressure  at  the  top  of  the  building  and  con- 
taining at  least  3,000  gallons  of  water  constitutes  a  very  good  sup- 
ply. It  is  not  usually  convenient  to  place  a  gravity  tank  at  a  high 
enough  elevation  to  give  an  adequate  pressure. 

Note. — 25   lbs.    on  top   floor  requires    an  elevation    of   about 
40  feet  above  the  roof. 


Howard  Hose   Rack.     Top  \  ie\v   showing  part  of 
Hose  on  pins  and  remaining  pins  swung  to  one  side 


Howard  Hose  Rack.     Hose  Suspended  on  Swinging  Pins. 


Pumps  can  also  be  used  as  a  standpipe  supply,  but  to  give  first 
class  protection  the  pumps  should  be  automatic,  that  is,  should 
maintain  a  constant  pressure  on  the  system. 

A  good  quality  linen  hose — preferably  labelled  by  the  Under-   Hose. 
writers'  Laboratories — is  the  best  for  standpipe  use.      Rubber  or  rub- 
ber lined  hose  deteriorates  much  more  rapidly  and  does  not  coil  up 


J82  LECTURES  ON  FIRE  INSURANCE 

into  as  small  a  space.  Linen  hose,  when  not  frequently  used,  lasts 
a  long  time.  Hose  should  be  neatly  folded  on  a  suitable  rack  and 
arranged  so  that  it  can  be  quickly  pulled  down  without  kinking. 
There  are  many  desirable  hose  racks  on  the  market,  some  of  which 
have  been  passed  by  the  Laboratories. 

Hose  should  usually  be  1)4",  though  1"  and  2"  hose  are  some- 
times used.  1}("  is  a  common  size  and  can  be  used  to  advantage 
if  the  water  pressure  is  good.  The  disadvantage  of  larger  hose  is 
that  it  is  harder  to  handle  and  will  waste  more  water  should  it  have 
to  be  abandoned  in  a  fire  and  later  possibly  burn  off. 

Nozzle  should  be  brass,  with  outlet  ^  to  ^"  in  size. 
Mainten-  ^^  ^•''  ^'^^7  essential  that  the  standpipe  be  kept  in  commission  at 

ance.  all  times  with  water  right  up  to  the  hose  valves.     There  is  no  time 

to  open  valves  in  the  cellar  or  at  some  distant  point  after  the  fire 
starts. 

Where  a  building  is  not  heated  it  is  possible  to  put  the  stand- 
pipe  on  a  dry  system  with  an  automatic  dry  valve  such  as  is  used  in 
sprinkler  systems.      This  requires  very  careful  supervision. 
Large  Stand-  Occasionally  a  6"  standpipe  with  2^"  hose  is  desirable.      Their 

pipe.  vise  should,  however,  be  limited  to  fireproof  buildings  or  to  stair 

towers  that  are  cut  off  from  the  building  by  a  standard  fire  wall. 
In  high  fireproof  buildings  they  are  desirable,  as  the  firemen  can 
use  them  instead  of  dragging  hose  up  many  flights  of  stairs.  It  is 
generally  desirable  to  have  steamer  connections  at  the  base  of  such 
standpipes  where  the  fire  department  can  couple  on  their  hose  and 
pump  in  with  a  fire  engine.  Indeed  such  a  standpipe  without  any 
water  supply  except  the  steamer  connection  is  desirable  in  high 
buildings  of  this  type,  where  for  any  reason  it  is  not  convenient  or 
practical  to  have  water  in  the  pipe  under  constant  pressure. 


Brass  Nozzle  for  Standpipe  Use 
Steamer  Connection 

The  old  fashioned  plan  of  placing  standpipe  on  the  outside  of 
buildings  with  a  gallery  at  each  floor  level  has  now  gone  almost 
entirely  out  of  use,  as  the  inside  pipes  when  properly  located  are 
much  easier  to  use  and  maintain. 


FIRE  PROTECTION  183 


One  of  the  principal  troubles  experienced  in  standpipe  ec|uip-  Hose  Valves, 
ments  is  the  leaky  hose  valve.  This  allows  water  to  leak  into  the 
hose,  drop  by  drop,  and  rot  it.  A  valve  with  a  soft  metal  disc 
should  be  used  for  this  purpose,  as  it  is  more  likely  to  be  tight. 
Several  methods  have  been  suggested  for  preventing  this  trouble,  and 
some  of  them  are  quite  satisfactory. 

Roof  hydrants  can  often  be  installed  to  advantage  in  connection   r^qJ  ^y- 
with    large  standpipes.      These   are    particularly    valuable   on    flat   drants. 
roofs  with  parapetted  walls  in  heavily  exposed  locations.     The  roof 
hydrant  should  be  of  approved  type,  and  monitor  nozzles  can  often 
be  used  to  advantage. 


Invincible  Monitor 
Nozzle 


Morse  Monitor  Nozzle 

Meters   for   Fire   Service 

The  problem  of  metering  water  for  fire  service  is  one  of  quite  Need  of 
recent  origin  but  of  growing  importance.  So  long  as  fire  service  Meters, 
pipes  are  used  for  fire  purposes  only,  there  would  seem  to  be  no 
more  reason  for  metering  them  than  for  metering  connections  to 
public  hydrants.  Of  late  years,  however,  the  number  of  fire  service 
pipes  has  increased  very  rapidly,  and  there  have  been  cases  wdiere 
water  was  taken  from  such  pipes  for  other  purposes.  Again,  many 
of  the  large  mills  have  extensive  systems  of  underground  pipes, 
and  it  is  not  infrequent  that  leaks  of  considerable  size  will  develop 
in  such  systems  which  may  exist  for  some  little  time  before  being  dis- 
covered. 

The  water  companies  or  departments  have  naturally  objected 
to  water  being  lost  in  these  ways,  and  in  several  localities  have 
passed  rules  that  all  fire  pipes  be  metered.  This  custom  will  prob- 
ably grow,  especially  in  cities  where  water  is  scarce  or  is  pumped 
at  considerable  expense. 

It  has  been  conclusively  proven  that  most  of  the  old  types  of 
meters  in  use  for  domestic  service  are  detrimental  to  fire  protection, 
and  it  is  only  recently  that  new  devices  have  been  put  upon  the 
market  that  are  suitable  for  this  purpose. 


J84  LECTURES  ON  FIRE  INSURANCE 

There  are  five  principal  types  of  meters  in  coniiiion  use  : — 

Types  of  (1)    Disc  Type.      This   depends  on  the  oscillation  of   a   disc. 

Meters.  usually  of  hard  ruhber  shaped  like  the  segment  of  a  hollow  sphere. 

This  is   a   positive   displacement   meter   and   is   perhaps  the    most 

accurate  type,  but  the  friction  loss  is  large,  ranging  from  13  to  25 

lbs.  under  normal  flows. 

(2)  Rotary  Piston  Type.  This  depends  on  the  rotation  of  a 
piston,  usually  made  of  hard  rubber.  In  some  makes  there  are  two 
revolving  pistons  fitting  together  as  do  the  buckets  in  a  rotary  pump. 
In  other  makes  an  irregular  shaped  piston  rotates  in  a  cylinder  of 
similar  shape  but  larger  size.  This  is  a  positive  displacement  meter 
of  about  the  same  accuracy  as  the  disc  type.  The  friction  loss 
varies  from  6  to  48  lbs.  under  normal  flows. 

(3)  Reciprocating  Piston  Type.  This  is  built  somewhat  on 
the  principle  of  the  steam  end  of  a  steam  pump.  There  are  but 
few  meters  of  this  type  made  and,  as  might  be  supposed,  the  friction 
loss  is  very  great. 

(4)  Current  Type.  This  is  built  somewhat  on  the  principle 
of  a  water  wheel,  the  wheel  usually  being  of  hard  rubber  and  re- 
volving on  a  vertical  axis.  This  type  is  somewhat  less  sensitive 
than  any  of  those  pre\iousl3'  mentioned  and  the  friction  loss  is 
decidedly  less,  being  only  3  to  8  lbs.  under  normal  flows. 

(5)  Ventiiri  Type.  This  depends  on  the  principle  that 
when  water  passes  through  a  contraction  in  a  pipe  or  a  throat  the 
velocity  is  increased  but  the  pressure  is  reduced.  The  meter  con- 
sists simplv  of  a  casting  similar  to  a  pipe  casting,  rapidly  decreasing 
in  diameter  until  the  throat  is  reached  and  then  more  gradually  en- 
larging to  normal  size.  The  difference  in  pressure  at  the  throat 
and  in  front  of  the  meter  is  taken  and  is  used  to  actuate  the  reg- 
istering device.  The  registering  de\'ice  is,  howe\er,  very  compli- 
cated and  expensive  and  has  to  be  kept  in  a  dustproof  case  under 
frequent  inspection.  The  registering  de\  ice  alone  costs  about  $400 
for  the  smallest  size.  The  meter  is  maile  in  sizes  from  2  inches  to 
17  feet  in  diameter,  but  the  sizes  less  than  6  inches  are  generally 
not  economical  as  compared  with  other  types  of  meters.  Each 
size  is  designed  with  different  diameters  at  the  throat  to  care  for 
different  conditions,  and  is  cpiite  accurate  iox  the  range  for  what  it 
is  designed.  Friction  loss  is  smaller  than  that  of  most  any  other 
type,  except  the  Hersey  Detector  and  some  of  the  current  types. 
It  is  particularly  adapted  for  low  velocities  and  large  volumes. 
Also  for  measuring  hot  water,  sewerage,  etc.,  which  would  clog  or 


FIRE  PROTECTION  185 


corrode  most  types  of  meters.  Under  a  flow  of  4,000  *;allons  a 
minute,  a  12-inch  meter  with  a  6-inch  throat  has  a  loss  of  about 
1.5  lbs.,  and  with  a  5-inch  throat  a  loss  of  about  4  lbs. 

It  will  be  seen  that  for  normal   flows  tlie   old   types  of   meters   Objcctionsto 
caused  a  friction  loss  of  3  to  48  lbs.,  which   of   course  is  a  serious  OldTypcsof 
detriment  to  fire  protection.     Furthermore,  the  Disc,  Rotary  Piston       ^  ^'"^* 
and  Reciprocating-  Piston  types   are   subject  to   clogging  by   sticks 
and  sediment,  and  if  wedged  in  place  may  prevent   the  passage  of 
nearly   all   water  through   them.      The    current   type    is    not    very 
accin-ate  for  small  flows.     Practically  all   these   meters,  except   the 
Venturi  type,  require   strainers  and   fish   traps.     Dirt,  leaves,  etc., 
may  become  lodged  in   these   strainers,  especially  in   case  of  heavy 
draft,    and   seriously   interfere    with    the    flow    of    water.     As  the 
Venturi  meter  is  not   suitable  for  small  flows,  and  needs  careful  su- 
per\ision,  it  is  quite  evident  that   all  of   these  tyjDes   of   meters  are 
unsuitable  for  pri\ate  fire  ser\ice  pipes. 

A  niunber  of  methods  for  overcoming  these   objections  have   Methods  of 
been   suggested   and  tried  with   more    or    less    success.      Amongst    Overcoming 
these  might  be  mentioned  installing  a  meter  of   larger  size,  such   as   Objections, 
a  6-inch  meter  in  a  4-inch  pipe  in  order  to  reduce  the  friction  loss  ; 
installing  several  meters  in  parallel ;   using  a  proportional  meter  in 
which   the  meter   is   located   in   a  by-pass  aliout   a    check   vahe   or 
baflle  plate  and   measures   the   proportion   of   the  water  that   flows 
through  the  by-pass. 

The  failure  of  these  de^  ices  to  gi\  e  the  results  desired  led  to  Detector 
the  invention  of  the  so-called  detector  meters.  The  first  of  these.  Meters, 
known  as  the  Ilersey  Detector  Meter  type,  D.  M.,  consisted  of  a 
by-pass  containing  an  ordinary  meter,  gate,  and  check  valve  around 
a  main  check  \ahe  with  a  grooved  seat.  The  by-pass  was  about 
half  the  diameter  of  the  main  pipe.  There  was  a  small  pipe  lead- 
ing from  the  grooxe  in  the  seat  of  the  main  check  ^•al\  e  to  the 
atmosphere.  This  contained  a  small  meter  arranged  to  register 
time  instead  of  quantities  of  water.  This  would  register  the 
length  of  time  that  the  check  valve  was  open  and  water  was 
flowing.  The  main  check  valve,  being  weighted,  remains  closed 
except  when  a  large  amount  of  water  is  flowing.  Under  normal 
conditions  any  water  that  flows  passes  through  the  by-pass  and  is 
accurately  metei-ed.  When  draft  becomes  heavy,  due  to  fire,  the 
main  check  valve  opens  and  the  small  meter  is  brought  into  action 
to  register  the  length  of  time  the  check  remains  open.  The  idea  is 
to  charge  for  water  used  under  normal  conditions,  but  to  make  no 
charge  for  the  large  flows  that  would  open  the  main  check  \  ahe. 


186 


LECTURES  ON  FIRE  INSURANCE 


The  Factory  Mutual  Insurance  Companies  also  ^vorked  out  a 
type  of  detector  meter  quite  different  from  the  above.  It  consisted 
briefly  of  a  check  \alve  with  a  by-pass  arranged  to  accurately 
meter  all  the  water,  whether  it  passed  through  the  by-pass  or  the 
main  pipe.  This  was  accomplished  by  ha\  ing  a  meter  in  the  by- 
pass arranged  to  register  in  two  different  ways,  l^efore  the  main 
check  opened  the  meter  was  acted  upon  directly  by  the  water  flow- 
ing through  the  by-pass.  When,  howe\  er,  the  check  opened, 
owing  to  increase  in  draft,  a  \e\cr  was  made  to  operate  a 
mechanism  that  changed  the  registration  of  the  meter  and  it  then 
became  a  proportional  meter  and  registered  proportionally  the 
amount  of  water  that  passed  through  the  main  pipe. 


f=|p 


Hersey  Detector  Meter — F.   M.  Type. 
(Main  pipe  in  section.     By-pass  containing  meter  at  rear) 

Hersey      De-  The  Hersey  Manfg.  Co.,  of  Boston,  has   lately  de\  eloped  this 

tector  Meter    meter,  and  it  is  now  built  as  shown  in  the  cut,  and  is  known  as  the 

F.  M. Type.   Y.  M.   type.      Thei-e   is   one   meter   in   the  by-pass  and  an  entirely 

separate  meter  in  the  main  pipe  in   front  of   a   baffle   plate   located 

close  to  the  weighted   check  \  ahe.      This   latter   is   a   proportional 

meter  and   is   permanently   set    to    register    the    amount    of    water 

passing  by  the  baffle   plate  as  a  certain   proportion   of   this   flow   is 

deflected  through   the  meter.      Therefore,  in  order  to  And   the  total 

flow  the  reading  of  the  meter  in  the  by-pass  is  taken  and   added  to 

the  reading  of  the  proportional  meter  in  the  main  pipe. 

The  action  of  the  meter  is  as  follows  : — 

For  small  flows  the  weighted  check  \al\e  remains  closeil  and 
the  water  all  passes  through  the  b\-pass  and  is  metered  in  the 
usual  way  by  a  (hsc  meter.      When   the  flow  becomes  too   great   to 


FIRE  PROTECTION  187 


be  cared  for  by  the  by-pass  the  main  check  valve  will  open  owing 
to  the  reduction  in  pressure.  In  the  6-inch  meter  this  occurs  where 
a  flow  of  about  130  gallons  per  minute  is  reached.  The  water 
passing  through  the  main  pipe  is  then  registered  on  the  propor- 
tional meter  located  in  a  casting  at  the  top  of  the  main  pipe  on  the 
up  stream  side  of  the  check  valve  as  shown  at  the  right  hand  side 
of  the  cut.  In  case  the  flow  falls  below  130  gallons  per  minute  the 
weighted  check  will  close  and  the  water  ^^  ill  all  flow  through  the 
by-pass  as  before. 

Before  the  check  vah  e  opens  the  friction  loss  in  a  6-inch  meter 
runs  from  0  lbs.  with  no  water  flowing  up  to  about  3  lbs.  with  130 
gallons  per  minute  flowing.  When  the  check  opens  the  friction  loss 
drops  to  less  than  1  lb.  and  then  increases  with  the  flow  until  with 
1,000  gallons  flowing  it  is  just  a  pound.  With  "2,000  gallons  flow- 
ing the  loss  is  about  3^  lbs.  but  1,000  gallons  is  considered  normal 
for  this  size  of  pipe. 

The  accuracy  is  practically  100%  for  flows  of  o^•er  500  gallons 
and  under  no  rate  of  flow  does  it  drop  below  95%. 

This  type  of  meter  is  now  being  almost  universally  used  where 
meters  are  required  in  fire  service  pipes,  and  may  be  considered 
very  satisfactorv  both  from  the  standpoint  of  the  waterworks  offi- 
cials and  the  fire  insurance  interests. 

It  is,  howe\er,  expensive  and  its  use  is  not  recommended  ex- 
cept in  cases  where  no  other  safeguard  seems  adequate. 


QUESTIONS 

1.  Describe    size  and    location  of   standpipes   desirable    in    a 
building  of  ordinary  (not  fireproof)  construction. 

2.  What  size  and  kind  of  hose  is  desirable   for  standpipe  use? 

3.  Under  what  conditions  are  large   standpipes  of  4  inches  to 
6  inches  diameter  desirable  ? 

4.  Why  are  the  ordinary  types  of   domestic  ser^•ice   meters  not 
desirable  for  fire  service  ? 

5.  Describe  a  Hersey  Detector  Meter,  type  F.  M. 

6.  What  is  the  friction  loss   under  normal    flows   for  this   type 
of  meter? 

7.  What  is  it  necessary  to  do  in  order  to  find  the  correct  read- 
ing of  a  meter  of  this  type  ? 


J88  LECTURES  ON  RRE  INSURANCE 

BIBLIOGRAPHY 

Crosby-Fiske  Handbook.     Ed.  1909,      P.  341. 
Insurance  Engineering,  May  1905.     Article  on  Meters. 
Xat.  Fire  Protec.  Ass'n,  April  1912.      Article  on  meters. 
Journal  of  N.  E.  Waterworks  Ass'n.      Vol.  XII,  No.  2. 

Vol.  XIX,  No.  3. 
"  "  "  "         Vol.  XVI,  No.  4. 

Vol.  XVII,  No.  4. 
"  "  "  "         Vol.  XXII.  No.  3. 


-WATCHMAN^S  SERVICE.    SELF-INSPECTION 
—PRIVATE  BRIGADES 

Alarm  Service  in  General 


There  are  three  principal  forms  of  alarm  service: —  Forms  of 

1.  Watchmen.  Alarm 

2.  Automatic  Alarm.  *  ^' 

3.  Sprinkler  Alarm  Valve. 

Sprinkler  alarm  valves  when  connected  to  suitable  outside 
points  and  properly  supervised  give  very  good  alarm  service,  but 
as  they  are  adjuncts  of  sprinkler  systems  they  will  not  be  con- 
sidered in  this  course. 

Watchmen  and  automatic  alarms  each  have  their  good  points   Watchmen 
and  their  defects.      There  are    local    conditions  in  which    each    is   vs.  Auto- 
more  suitable   than  the  other.      In  general    it   may   be  said   that   a   "^f  "^ 
„,  ,  ,.,,,.  ,  Alarms, 

nrst    class   watchman   properly    instructed    and    making  rounds  at 

frequent  intervals  is  better  than  any  automatic  system,  largely 
because  he  is  human.  On  the  other  hand  it  is  probably  true  that 
a  good  automatic  alarm  properly  maintained  is  more  efticient  than 
the  average  watchman.  A  watchman  can  often  extinguish  a  fire 
before  it  gets  any  headway,  while  an  automatic  alarm  can  do  noth- 
ing but  transmit  the  signal.  An  automatic  alarm,  however,  if 
properly  installed  covers  all  parts  of  the  property  at  all  times, 
while  a  watchman  cannot  be  expected  to  cover  any  one  point 
more  than  once  an  hour. 

Watchmen  have  frequently  caused  fires  by  carelessness,  such 
as  smoking  or  dropping  their  lantern.  Only  recently  there  was  a 
case  where  a  watchman  in  a  woodworking  plant  was  using  a  dip 
tank  for  varnishing  some  fishing  rods.  His  lantern  set  fire  to  the 
naphtha  fumes  in  the  dip  tank  and  a  bad  fire  resulted.  Automatic 
alarms  also  have  been  known  to  cause  fires,  but  not  as  often  as 
watchmen.  A  few  months  ago  a  risk  equipped  with  thermostats 
suffered  a  slight  loss  through  the  outside  thermostat  wires  becom- 
ing crossed  with  a  lighting  circuit,  thus  allowing  the  higher 
voltage  current  to  enter  the  building  and  burn  out  the  test  clock. 


J90 


LECTURES  ON  FIRE  INSURANCE 


Watchman 
vs.  Auto- 
matic 
Alarms. 


Qualifica- 
tions of  a 
Watchman. 


Watchmen  through  ignorance  or  carelessness  often  add 
greatly  to  the  fire  loss  through  errors  of  judgment.  Many  large 
losses  have  been  due  to  the  fact  that  the  watchman  tried  to  put 
out  a  fire  that  was  beyond  his  control  instead  of  calling  at  once 
for  help.  In  a  Worcester,  Mass.,  bleaching  establishment  recently 
a  fire  occurred  in  a  dryroom  upstairs  and  opened  some  sprinklers. 
The  watchman,  on  a  floor  below,  heard  the  water  running  and 
assumed  that  a  sprinkler  had  broken  away  from  corrosion,  as  this 
had  occasionally  happened  before.  He  thereforeran  and  closed 
the  controlling  valve  without  first  investigating.  Later  when  he 
found  there  was  a  fire  he  opened  the  valve  but  it  was  then  too 
late,  for  the  fire  was  beyond  sprinkler  control.  A  loss  of  nearly 
$100,000  resulted.      A   thermostat  system  never  errs  in  judgment. 

In  certain  places  automatic  alarms  are  not  practical  on 
account  of  local  conditions.  Under  this  heading  might  be  in- 
cluded tanneries,  bleacheries,  carbonizing  plants  and  various 
chemical  works  where  the  corrosive  action  is  severe.  In  isolated 
risks  where  there  is  no  fire  department  or  central  station  to  which 
the  system  can  be  connected,  automatic  alarms  are  of  very  doubt- 
ful value  for  two  reasons. 

1.  The  maintenance  is  very  apt  to  be  poor. 

2.  There    is  liable   to   be  no  one  to  hear  the  alarm    if    it 

comes  in. 

They  are,  however,  of  very  great  value  in  city  buildings 
where  they  can  be  connected  to  a  central  station  and  properly 
supervised.  There  are  many  city  buildings  where  the  insurance 
involved  does  not  warrant  the  expense  of  maintaining  a  watch- 
man, but  where  an  automatic  alarm  is  a  paying  investment. 

So  far  as  rating  goes,  approved  watchman's  service  and  au- 
tomatic alarm  are  usually  given  about  equal  credit.  It  is  an 
important  duty  of  the  inspection  departments,  however,  to  see  that 
the  watchmen  are  capable  men,  properly  instructed,  and  making 
their  rounds  regularly  on  an  approved  recording  device.  It  is  no 
less  important  to  see  that  thermostat  systems  are  properly  main- 
tained and  kept  in  good  working  order  at  all  times. 

Watchmen 

Too  many  valuable  plants  are  left   for  nearly  half  the  time  in 

the  charge  of  a  watchman  whose  only  qualification  is  that  he  will 

work  for  small  pay.      Old  employees  who  have  long  passed   their 

years    of  usefulness,  cripples    who   are   not    able   to   do  any    hard 


WATCHMAN'S  SERVICE  191 


work,  and  ignorant  foreigners  who  have  not  been  in  the  country 
lono-  enough  to  learn  English,  are  too  often  employed  for  this 
responsible  work. 

A  good  watchman  should  be  between  the  age  of  twenty-five 
and  sixty-five  years,  strong  and  active,  of  good  judgment  and 
capable  of  quick  action  in  case  of  emergency.  He  should  not 
only  know  what  to  do  in  case  of  fire  but  should  also  know  how 
to  handle  a  gang  of  mischievous  boys  or  a  professional  thief. 

The  very  best  judgment  is  often  required  to  know  when  to 
stop  and  fight  a  fire  and  when  to  run  and  give  an  alarm. 

Watchman  should  make  rounds  hourly  nights  and  also  bi-  Duties  of  a 
hourly  or  oftener  on  Sundays,  holidays  or  other  days  when  plant  Watchman. 
is  not  in  operation.  It  is  not  usually  considered  necessary  to 
have  rounds  made  as  often  during  the  day  as  during  the  night,  as 
thei-e  is  a  better  chance  of  a  fire  being  discovered  by  outside 
parties.  The  first  round  at  night  is  the  most  important  of  all,  and 
should  be  made  as  soon  as  possible  after  shut  down.  On  this 
round  he  should  see  that  all  lights  are  extinguished,  all  windows 
closed,  all  fire  doors  shut,  all  oily  waste  properly  cared  for  and 
all  fires  or  lights  used  in  manufacturing  processes  are  extin- 
guished or  properly  safeguarded. 

Stations  should  be  located  to  properly  cover  all  parts  of  the 
plant  except  that  occasionally  it  may  be  found  desirable  to  omit 
certain  rooms  such  as  those  where  volatile  oils  are  kept  and  some 
non-hazardous  storage  sections. 

The  watchman  should  be  instructed  to  make  his  rounds  care- 
fully and  slowly,  stopping  to  investigate  any  suspicious  noise  or 
smell.  In  plants  of  any  considerable  size  the  watchman  or  watch- 
men should  devote  their  whole  time  to  watching,  and  should  not 
be  required  to  do  sweeping  or  other  work. 

The  watchman  should  be  familiar  with  the  location  of  the 
nearest  fire  alarm  box  and  know  how  to  operate  the  steam  whistle 
or  other  forms  of  alarm  that  may  be  available  in  the  plant.  He 
should  be  thoroughly  instructed  as  to  the  use  of  all  fire  appliances 
such  as  pails,  chemicals  and  standpipes,  and  should  know  where 
these  are  located.  He  should  also  know  how  to  start  the  fire 
pump  if  there  be  one. 

In  plants  equipped  with  automatic  sprinklers  he  should  know 
the  location  of  shut-off  valves  and  have  a  general  knowledge  of 
the  whole  system.  He  should  be  instructed  to  close  the  sprinkler 
valve  after  the  fire  is  entirely  out  and  drain  the  system  by  opening 


192 


LECTURES  ON  FIRE  INSURANCE 


Duties  of  a  the  draw-off  valve.  He  should  then  replace  any  sprinklers  that 
"Watchman,  may  have  fused  and  immediately  open  the  controlling  valve,  thus 
putting  the  system  again  in  commission.  Several  serious  fires 
have  resulted  from  the  neglect  of  this  simple  precaution.  The 
destruction  of  the  Phelps  Publishing  Co.  in  Springfield  in  1907, 
resulting  in  a  loss  of  over  half  a  million  dollars,  was  due  to  the 
watchman  shutting  off  the  sprinklers  after  a  small  fire  had  oc- 
curred and  then  stopping  to  telephone  the  superintendent.  Mean- 
while the  fire  started  up  again  and  destroyed  the  plant. 


Watchmen's 
Lanterns. 


Approved  Watchman's 
Lantern 

These  qualifications  and  duties  may  seem  a  good  deal  to 
expect  from  a  man  occupying  the  humble  position  of  watchman, 
but  it  should  be  borne  in  mind  that  in  most  plants  thousands  of 
dollars  worth  of  property  are  in  this  man's  sole  charge  for  a  large 
proportion  of  the  time,  and  it  is  false  economy  to  try  and  save  a 
few  dollars  by  hiring  cheap  and  inefficient  men  for  such  service. 
Watchmen  should  carry  a  lantern  that  is  safe  and  reliable. 
A    cheap    lantern    is    often    supplied    for    this   purpose    with    no 


WATCHMAN'S  SERVICE  J93 

thought  as   to  its  possible   dangers  as  a   fire  breeder.      The  quali-  "Watchmen's 
fications  of  a  good  watchman's  lantern  are  as  follows: —  Lanterns. 

1.  Strong  and  durable,  so  that  it  will  not  readily  be  broken. 

2.  Non-removable  oil  font  which  cannot  under  any  condi- 
tions faU  out  or  be  removed. 

3.  Heavy  wire  guard  around  the  globe  to  prevent  breaking 
if  it  should  be  struck. 

4.  Large  enough  oil  font  to  bui'n  all  night  without  need  of 
refilling.      A  good  standard  is  one  that  will  burn  fifteen  hours. 

5.  A  lamp  that  will  go  out  in  case  it  is  tipped  over.  This 
is  perhaps  a  refinement  that  need  not  always  be  insisted  on,  but 
there  are  good  lanterns  on  the  market  that  fulfill  this  requirement, 
and  they  are  not  expensive. 

It  was  formerly  considered  desirable  to  use  lanterns  burning 
sperm  or  lard  oil,  but  the  kerosene  used  to-day  may  be  consid- 
ered entirely  safe  for  this  purpose  and  is  much  more  convenient 
to  use.  It  is  needless  to  say  that  lanterns  should  be  filled  only  by 
daylight,  should  be  well  cared  for,  and  kept  clean. 

Electric  lamps  are  sold  as  watchmen's  lanterns  and  are  usu- 
ally satisfactory  though  somewhat  expensive  to  maintain.  Too 
much  confidence  should  not  be  placed  in  their  safety,  however. 
There  is  a  case  on  record  where  a  watchman  in  a  furniture  ware- 
house dropped  his  electric  lantern  and  it  went  out.  In  order  to 
find  it  he  lighted  a  match  and  thus  set  fire  to  the  packing  material 
around  the  furniture  and  burned  the  plant. 

Watchmen^s  Recording  Devices 

A  reliable  recording  device  is  necessary  in  order  to  make 
sure  that  the  watchman  is  making  his  rounds  as  directed.  These 
are  of  three  classes : — 

1.  Portable  clocks  or  watches. 

2.  Stationary  clocks. 

3.  Cental  station  systems. 

Portable  clocks  are  the  oldest  and  simplest  form  of  recording  Portable 
device.  A  clock  of  ordinary  design  is  used  except  that  it  has  a  Clocks, 
special  case  and  is  arranged  so  that  a  paper  dial  can  be  attached 
to  a  metal  plate  and  arranged  to  revolve  with  the  clock  at  the 
speed  of  the  hour,  hand.  The  dial  therefore  makes  a  complete 
revolution  every  twelve  hours.  The  dial  is  marked  with  radial 
lines,  each  representing  one  hour,  with  intermediallines  generally 
at   the   ten-minute   intervals.       The    clocks    are    usually    arranged 


J94 


LECTURES  ON  FIRE  INSURANCE 


Portable 
Qocks. 


for  twelve  stations,  though  a  greater  number  is  sometimes  found. 
There  is  a  key  for  each  station  and  the  keys  are  so  made  that  each 
one  will  register  on  a  different  part  of  the  dial.  The  key  is 
inserted  into  a  slot  in  the  case  of  the  clock  and  turned.  This 
motion  punctures  a  hole  or  stamps  a  number  on  the  paper  dial  at 
a  point  which  shows  the  hour  and  approximately  the  minute  at 
which  the  key  is  used. 

These  keys  are  permanently  attached  to  the  wall  at  points 
throughout  the  building  which  are  thought  to  be  suitable  for 
watchman's  stations  and  hung  on  chains  about  twelve  inches  long. 


Approved  Portable 

Watchman's  Clock 

In  Leather  Case 

These  chains  are  a  type  that  cannot  be  broken  and  mended  with- 
out clearly  showing  the  fact.  They  are  also  sealed  in  place  so 
that  they  cannot  be  removed  and  replaced  without  the  fact  being 
easily  detected.  The  reason  for  this  is  of  course  to  prevent  the 
watchman  from  removing  the  keys  to  his  headquarters  at  the 
beginning  of   his  rounds  and  replacing  them  before  he  finishes. 

In  the  earlier  types  of  clocks  the  keys  were  of  simple  con- 
struction and  could  be  easily  duplicated.  It  was  no  uncommon 
thing  for  a  dishonest  watchman  to  have  a  duplicate  set  of  keys 
made  with  which   he  could  make  all    his  records  without   leaving 


WATCHMAN'S  SERVICE 


J95 


his  comfortable  seat  in  the  boiler  or  engine  room.  The  modern 
approved  clocks  have  elaborate  safeguards  to  prevent  ''beating 
the  clock."  The  kevs  are  very  difficult  to  duplicate  and  they  are 
huno-  from  iron  boxes  carefully  sealed  in  place. 

Stationary  Clocks.      These  have  been   in  use   for  some   fifty   Stationary 
years  and  were   designed   to   do  away  with   the  possibility  of  key   Clocks, 
duplication.      The  earlier   types  used   electric   batteries,  but  most 
of  the  modern  clocks  use  magnetos. 


Stationary  Watchman's  Clock.  Interior  of  Clock 

Showing  Revolving  Cylindrical  Dial 

and  Electro-Magnets 


One  of  the  earliest  types  was  the  Howard  peg  clock  in  which 
a  pencil  was  pushed  against  a  revolving  paper  dial  and  when 
each  station  was  punched  the  pencil  dropped  a  peg  on  the  dial. 
In  later  types  there  were  electro-magnets  in  the  clock,  the  arms 
carrying  a  puncturing  point  or  a  number.  A  circuit  was  run 
from  each  magnet  to  a  push  button  at  the  station.  When  the 
button  was  pressed  the  circuit  was  closed  and  the  electro-magnet 
pulled  the  armature,  thus  puncturing  or  printing  a  number  on  the 
dial.  Such  a  clock  could  be  easily  "beaten"  by  short  circuiting 
the  different  circuits  at  some  point  near  the  clock,  thus  giving  the 
proper  records  without  visiting  the  stations.  In  the  older  clocks, 
too.  there  was  nothing  to  prevent  a  watchman  from  opening  the 
clock  and  puncturing   the   dial   by  hand.      In    later   types   this    is 


i% 


LECTURES  ON  FIRE  INSURANCE 


Stationary 
Clocks. 


Central 
Station 
Systems. 


safeguarded  by  putting  on  an  attachment  that  punctured  the  edge 
of  the  dial  every  time  the  clock  is  opened. 

In  the  modern  magneto  clock  there  is  no  battery,  but  the 
current  is  generated  by  a  small  magneto  placed  at  each  station. 
These  magnetos  have  less  electrical  resistance  than  the  electro- 
magnets at  the  clock,  so  that  if  an  attempt  is  made  to  "beat"  the 
clock  by  tapping  the  wires  and  using  a  portable  magneto  there 
v^'ill  not  usually  be  enough  current  flow  through  the  electro- 
magnets to  operate  the  puncturing  device.  The  modern  magneto 
clock  is  almost  impossible  to  "beat." 

Some  clocks  are  fitted  with  a  device  by  which  outside 
parties  can  be  notified  in  case  the  watchman  drops  dead  or  is 
otherwise  prevented  from  continuing  his  rounds.  An  electric 
bell  is  located  in  the  house  of  the  superintendent  or  other  respon- 
sible party,  connected  to  the  watchman's  clock  in  such  a  way  that 
if  the  watchman  neglects  to  push  a  lever  on  the  clock  every  hour 
this  bell  will  be  thrown  into  circuit  and  ring  after  a  certain 
interval. 

Some  of  the  modern  clocks  are  being  arranged  to  give  a 
twenty-four  or  thirty-six  hour  record.  This  is  done  to  prevent 
the  record  becoming  confused  when  it  is  left  in  the  clock  for  three 
intervals  such  as  Saturday  night,  vSunday  and  Sunday  night.  In 
some  cases  it  is  done  by  a  twenty-four  hour  dial  and  in  others  by 
having  the  whole  dial  slide  along  a  certain  distance  each  twelve 
hours. 

Central  Station  Systems.  These  were  designed  to  give  ad- 
ditional protection  by  making  each  watchman's  station  a  fire  alarm 
box  and  by  having  all  rounds  recorded  at  a  central  station  where 
if  a  round  did  not  come  in  on  scheduled  time  a  man  could  be 
sent  to  the  plant  to  find  the  reason  therefor.  There  is  no  clock 
at  the  risk  but  a  closed  circuit  loop  runs  from  a  central  station 
and  connects  to  a  certain  number  of  boxes.  The  wiring  is  under 
constant  test,  and  if  a  break  occurs  immediate  notification  is 
given.  Each  box  is  a  transmitter  which  is  arranged  to  send  in 
the  box  number  to  the  central  station  by  breaking  the  circuit  at 
proper  intervals.  There  are  men  on  duty  at  all  times  at  the 
central  station  to  receive  the  signals  which  are  recorded  on  report 
blanks  giving  the  hour  and  minute  that  the  signal  is  received. 
A  duplicate  copy  of  this  is  sent  to  the  assured  the  next  day. 

The  ordinary  signal  is  made  by  inserting  a  key  in  the  box 
and   turning  it.      This  partially  winds   the   transmitter   and   gives 


WATCHMAN'S  SERVICE 


197 


one  round  of  the  box  number.      The  fire  signal  can  be  given  from    Central 
any  box  by  breaking  the  ghiss  in  the  door,  opening  the  door,  and   Station 
pulling  the   lever  way   down.      This    fully  winds   the   transmitter   Systems, 
and  gives  the  box  number  several  times  with  the  Morse  signal  for 
the  letter  /"between  each  round.      The  wiring   is    installed  with  a 
grounded  system  so  arranged  that  in  case  of  a  break    in  the  line  a 
switch  can  be  thrown  which  will  put  the  system  in  working  order 
until  repairs  can  be  made.      (See  sketch,   p.  198.) 


Central  Station  Watchman's  Box 

Door  open  showing  lever  which  is  pulled  way  down 

for  fire  signal 


At  the  central  station  there  are  runners  on  duty,  and   in  case   System  of 
the  signal   is  not  received   from  any  box  within  a  specified  time,    "Wiring, 
usually  fifteen  minutes,  a  runner   is  sent   to  find   the  reason  there- 
for.     If  the  watchman  is  found  to  be  incapacitated,  tht  operating 
company  sends  a  man  to  watch  the  plant  for  the  rest  of  the  night. 

The  National  Board  rules  for  signaling  systems  give  detailed 
rules  for  the  construction  and  installation  of  the  necessary  appar- 
atus. Each  circuit  is  limited  to  five  watchmen  and  to  forty 
boxes.  The  fire  signals  are  non-interfering  and  can  be  sent  from 
two  boxes  at  the  same  time  without  mixing  the  signals. 


J98 


LECTURES  ON  HRE  INSURANCE 


5\NlTCh 


Outaiae  une 


—    G  round 

Wiring  for  Central  Station  Watchman's  System 

Explanation. 

Heavy  lines  indicate  main  circuit.  Light  lines  indicate  secondary  or  relay  circuits.  A' 
B'  and  C  represent  watchman's  boxes.  They  are  arrana;ed  to  transmit  signal  eitlier  through 
complete  outside  line  or  through  part  of  outside  circuit  and  ground. 

Xormally  the  switch  at  central  station  is  set  as  shown.  The  current  then  starting  from 
the  grounded  battery  passes  through  Relay  i,  outside  line,  Relay  2,  binding  post  B  and  switch 
to  A,  hence  to  ground.  When  a  watchman's  box  is  ojierated  as  at  A'  the  circuit  is  broken  by 
the  revolving  of  the  transmitter  and  the  box  number  is  registered  on  tape  machine  through 
Relays  i  and  2.     The  ground  at  the  box  is  not  used  in  this  case. 

If  the  outside  line  should  break  as  at  X,  the  switch  is  thrown  into  position  shown  by  dotted 
lines.  Signal  from  box  A'  would  then  be  received  through  Relay  i  and  ground  at  box.  Signal 
from  Box  C  would  be  received  through  Relay  2,  switch  points  B  and  C  to  battery  returning 
through  ground  from  box. 

Central  station  systems  are  of  course  only  practical  in  cities 
where  there  are  a  large  number  of  risks  within  a  comparatively 
small  radius.  The  cost  of  maintenance  is  heavy  and  it  will  not 
pay  to  establish  a  station  iniless  there  is  a  large  amount  of  busi- 
ness for  it.  The  same  station  can,  however,  be  used  for  thermo- 
stat and  supervisory  service.  It  gives  very  superior  service  if 
properly  maintained  and  is  recommended  as  being  the  very  high- 
est development  of  watchman's  recording  apparatus.  It  is  usu- 
ally given  more  credit  in  the  insurance  rate  than  ordinary  clock 
service. 


WATCHMAN'S  SERVICE  J99 


Self-Inspection 

No  fire  protection  is  of  permanent  value  unless  it  is  properly  NcedofScIf- 
maintained.  Too  many  people  install  costly  devices  for  discover-  Inspection, 
ing  or  extinguishing  fires,  solely  for  the  reduction  in  insurance 
rate  which  results,  and  then  proceed  to  neglect  it.  No  machine 
will  run  without  care  and  therefore  those  devices  are  pretty  sure 
to  deteriorate  under  such  conditions.  It  is  largely  this  weakness 
of  human  nature  that  makes  it  necessary  for  the  insurance  com- 
panies to  maintain  the  costly  systems  of  inspection  that  are  found 
all  over  the  country.  Without  this  frequent  reminder  a  large 
number  of  assured  would  soon  let  their  fire  appliances  get  into  a 
condition  where  they  would  be  practically  useless.  But  an  insur- 
ance inspector  can  visit  a  plant  only  three  or  four  times  a  year 
and  for  the  other  three  hundred  and  sixty  days  more  or  less  there 
is  often  no  one  looking  after  this  very  important  part  of  the 
plant's  equipment.  It  is  therefore  quite  evident  that  for  good 
protection  the  assured  should  maintain  a  system  of  self-inspection 
of  fire  appliances.  Many  of  the  larger  plants  have  already 
adopted  such  a  system  and  the  results  are  very  gratifying.  For 
best  results  some  responsible  person  like  the  master  mechanic  or 
engineer  should  be  given  full  charge  of  all  fire  appliances.  In  a 
few  of  the  largest  plants  men,  sometimes  known  as  fire  marshals, 
have  been  appointed  to  do  nothing  else  and  their  time  is  fully 
occupied  if  they  do  their  work  conscientiously.  In  any  case  the 
man  in  charge  should  be  given  authority  to  make  repairs  when 
found  necessary  and  should  be  held  fully  responsible  for  anything 
found  out  of  order. 

A  thorough  inspection  of  all  appliances  should  be  made  every 
week  and  it  is  desirable  to  have  this  done  by  someone  other  than 
the  man  in  charge.  Otherwise  there  is  a  temptation  not  to  report 
certain  defects  for  which  he  himself  is  held  responsible.  A  report 
should  be  made  in  writing,  using  a  blank  prepared  for  the  pur- 
pose. The  blank  should  be  carefully  filled  out,  dated,  and  signed 
and  then  presented  to  the  manager.  He  should  look  through  it 
carefully  noting  any  defects  so  that  they  can  be  remedied  at  once 
and  then  file  it  away. 

The  Fire  Underwriters'  Uniformity  Association  has  recently  Report 
adopted  a  blank  for  this  purpose.  It  was  designed  to  cover  all  Blank, 
probable  conditions  and  should  be  modified  to  suit  any  particular 


200 


LECTURES  ON  nRE  INSURANCE 


Report 
Blank. 


risk.  Such  a  blank  should  cover  in  a  general  way  the  following 
topics: — 

Condition  of  sprinkler  gate  valves. 

Condition  of  sprinkler  alarm  or  dry  valves  with  their  electric 
attachments. 

Condition  of  gravity  and  pressure  tanks. 

Condition  of  pumps. 

Condition  of  automatic  sprinklers. 

Condition  of  pails,  standpipes  and  chemical  extinguishers. 

Condition  of  fire  doors,  shutters  and  wired  glass  windows. 

Condition  of  hydrants  and  hydrant  house  equipments. 

Condition  of  stairway  and  elevator  doors  and  traps.  General 
cleanliness. 


Private  Fire  Brig-ades 


Need  for 

Private 

Brigade. 


Another  very  important  organization  in  large  plants,  es- 
pecially if  isolated  and  without  public  protection,  is  the  private 
fire  brigade.  Without  such  an  organization  much  valuable  time 
is  lost  in  case  of  fire,  and  the  apparatus  will  not  be  handled  to 
best  advantage.  As  previously  stated,  few  men  can  properly 
handle  such  a  simple  device  as  an  upset  chemical  extinguisher 
without  some  previous  experience.  Larger  devices  like  pumps 
and  two  and  one-half  inch  hose  require  even  more  skill  and 
practice.  A  "green"  man  can  soon  cripple  the  best  steam  pump 
if  he  does  not  know  how  to  handle  it.  A  large  hose  stream  is  not 
an  easy  thing  to  handle  especially  under  heavy  pressure.  There 
is  a  strong  back  pressure,  or  pull  toward  the  source  of  supply 
and  unless  properly  held  the  hose  will  pull  back  and  kink.  In- 
experienced men  will  often  find  it  impossible  to  hold  such  a 
stream  and  will  either  drop  it  or  allow  it  to  throw  them  over.  A 
number  of  serious  accidents  have  occurred  in  this  way.  Speed 
in  running  hose  and  coupling  the  lengths  together  can  only  be 
gained  by  practice. 
National  The  National   Fire  Protection  Association  has  issued  a  pam- 

Board  Rules,  phlet  on  private  fire  brigades  which  gives  full  data  for  organizing 
and  drilling  them  and  these  rules  should  be  followed  as  closely  as 
possible.  In  general  it  is  desirable  to  call  out  the  men  at  least 
once  a  month  by  giving  the  fire  signal.  They  should  then  go 
through  the  operations  of  laying  hose  and  operating  streams  just 
as  if  there  was  a  fire  in  progress. 


WATCHMAN'S  SERVICE  201 


The  same  principle  can  be  carried  into  large  city  risks  like  City  Risks, 
department  stores  to  great  advantage.  In  such  places  the  chance 
for  loss  of  life  is  even  more  important  than  the  loss  by  fire,  and 
no  detail  is  of  too  little  importance  to  be  considered.  Many  de- 
partment stores  have  a  very  elaborate  system  of  fire  drill  and  fire 
brigades.  In  this  case  the  organization  and  eiuties  are  somewhat 
different  than  in  an  isolated  plant,  as  the  use  of  large  hose  and 
hydrants  should  be  left  to  the  public  fire  department.  The  same 
general  principles  apply,  however,  and  the  details  can  easily  be 
worked  out  for  any  particular  case. 

QUESTIONS 

1.  State   the    desirable  and   undesirable    features   of   watch- 
man's service  and  thermostat  systems. 

2.  What  are  the  qualifications  of  a  good  watchman? 

3.  What  are  the  duties  of  a  watchman .'' 

4.  What  are  the  requisites  of  a  good  watchman's  lantern. 

5.  What   are   the  principal   forms  of  watchman's  recording 
apparatus  ? 

G.  What  are  the  main  features  of  a  magneto  clock  system? 

7.  Describe  a  central  station  watchman's  system. 

8.  Why  is  self-inspection  of  fire  appliances  desirable? 

9.  What  features  should  a  self-inspection  system  cover? 
10.  What  are  the  functions  of  a  private  fire  brigade? 

BIBLIOGRAPHY 

Crosby,  Fiske:   Handbook,      Ed.  1909,  p.  188. 

National    Board    of    Fire    Underwriters:   Rules    for    Private    Fire 

Brigades. 
National     Board    of     Fire    Underwriters:   Rules    for     Signalling 

Systems. 


5— AUTOMATIC  ALARMS. 


Definitions. 


Historical 
Sketch. 


A  Thermostat  is  a  de^•ice  for  gi\ing  a  signal  when  sulKciently 
heated.  Thermostats  are  generally  used  for  giving  a  fire  alarm,  but 
occasionally  for  other  purposes.  The  devices  that  are  used  for 
keeping  the  temperature  of  a  room  at  a  given  point  are  thermostats, 
and  they  are  generally  arranged  so  that  when  the  desired  tempera- 
ture is  reached  an  electrical  circuit  is  completed,  and  this,  through 
an  electro-magnet,  closes  or  partially  closes  a  steam  valve.  Ther- 
mostats are  also  occasionally  used  to  give  an  alarm  when  the  tem- 
perature in  a  dry  room  becomes  higher  than  is  desired.  It  is, 
however,  onlv  thermostats  that  are  used  for  gi^•ing  a  fire  alarm  that 
will  be  considered  here. 

Historical. 

The  first  patent  on  a  thermostat  was  apparently  taken  out  by 
Alexander  Ross  in  1863.  It  covered  a  de\  ice  operating  upon  the 
principle  that  two  strips  of  different  metals  brazed  together  will 
tend  to  bend  when  heated  on  account  of  fact  that  they  expand  un- 
equall}'.  This  is  the  basis  of  the  modern  Watkins  thermostat. 
The  two  metals  used  were  steel  and  brass  and  these  are  still  used  in 
the  Watkins  device.  The  first  device  of  this  kind  installed  is  said 
to  have  been  in  the  H.  B.  Claflin  building  in  New  York  about 
1873.  In  1877  the  Watkins  Company  extended  its  business  to  Bos- 
ton under  the  name  of  the  Automatic  Fire  Alarm  and  Extin- 
guisher Co.,  and  installed  the  first  equipment  in  the  store  of  C.  F, 
Hovey  &  Co.  on  Summer  Street.  About  1876  the  Buell  system 
was  invented.  This  was  a  closed  circuit  system,  and  the  thermostat 
consisted  of  two  small  diamond  shaped  brass  plates  soldered  to- 
gether with  soft  solder  melting  at  about  165°.  These  were  attached 
to  a  system  of  wares  that  ran  through  the  building,  so  that  when  a 
thermostat  fused  the  circuit  was  broken  and  an  alarm  gi\-en.  A 
few  equipments  were  installed  in  Boston. 

The  Martin  thermostat,  installed  by  the  Martin-Wilson  Fire 
Alarm  Co.,  was  invented  in  1882.  It  was  a  closed  circuit  device, 
operating  on  the  principle  of  the  expansion  of  a  volatile  liquid  in 
a  closed  receiver.  It  was  wired  on  a  single  circuit  and  the  thermo- 
stat in  operating  first  broke  and   then  closed  the  circuit.      This  was 


AUTOMATIC  ALARMS  203 

installed  in  the  Jordan  Marsh  Co.  store  and  a  few  other  buildings  in  Historical 
l^oston.  In  1889  Mr.  Edwin  Shcafe  and  the  late  Benj.  Wells  Sketch. 
bought  out  the  Martin-Wilson  Co.  and  formed  the  United  States 
Electric  Fire  .Signal  Co.  In  1890  the  U.  S.  solder  release  thermo- 
stat was  approved  bv  the  Boston  Board  of  Fire  Underwriters,  and 
was  then  installed  by  this  company.  In  1894  the  company  consoli- 
dated with  the  Automatic  Fire  Alarm  and  Extinguisher  Co.  of 
New  York  under  the  name  of  the  Boston  Automatic  Fire  Alarm  Co. 
In  1883  J.  A.  Tilden  and  F.  H.  Prentiss  patented  a  mercury 
thermostat  which  was  assigned  to  the  American  Fire  Alarm  Asso- 
ciation of  Boston.  A  few  of  these  were  installed,  but  in  1885  the 
same  company,  afterwards  known  as  the  American  Fire  Alarm 
Co.,  put  out  the  ether  tube  American  thermostat.  This  was  installed 
very  extensi\'elv  in  New  England  until  1900,  when  it  was  replaced 
by  the  Woodman  thermostat.  The  American  Fire  Alarm  Co.  was 
afterwards  known  as  the  National  Fire  Appliance  Co. 

The  Heat  Alarm  Co.  started  in  business  in  New  England  about 
189(t,  installing  the  Heat  Alarm  mercurv  thermostat  imtil  1898, 
when  the  Hersey  solder  release  thermostat  was  substituted.  This 
company  went  out  of  business  about  1900. 

The  White  Thermostat  Co.  installed  some  equipments  in  Provi- 
dence about  1893  and  put  out  improved  de\ices  in  1894  and  1898. 
About  1899  the  Wall  thermostat  replaced  the  White,  and  the  late 
Geo.  A.  Wall  started  a  company  which  installed  a  large  number  of 
equipments.  About  1906  the  Consolidated  Fire  Alarm  Co.  of 
New  York  bought  out  the  Wall  Thermostat  Co.  and  National  Fire 
Appliance  C(j.  and  operated  under  the  latter  name  for  a  short  time 
with  Geo.  A.  Wall  as  manager. 

A  little  later  the  American  District  Telegraph  Co.  entered  the 
thermostat  field  and  made  an  agreement  with  the  Consolidated  Co. 
by  which  the  latter  withdrew  from  the  thermostat  business  'n  New 
England  outside  of  Boston.  The  American  District  Telegraph  Co. 
took  over  all  apparatus  of  the  National  Fire  Appliance  Co.,  in- 
cluding the  Woodman  and  Wall  thermostats,  and  thus  got  control 
of  the  thermostat  business  of  this  territory. 

About  this  time  the  New  England  Insurance  Exchange  made  a 
rule  that  no  credit  would  be  given  to  new  equipments  unless  con- 
nected with  an  appro\ed  central  station.  This  made  it  more  diffi- 
cult to  get  contracts  and  since  then  the  American  District  Telegraph 
Co.  has  installed  \ery  few  equipments,  devoting  their  energies 
largely  to  sprinkler  supervisory  work.      This   company  began    in- 


204  LECTURES  ON  FIRE  INSURANCE 


stalling  the  Aero  system  in  19U9,  but  only  three  or  four  equipments 
have  as  yet  been  installed  in  Xew  England. 

Such  in  brief  is  the  history  of  the  thermostat  business  in  Xew 
England. 
Devices  Used.  A  thermostat  system  consists  of  three  main  parts. 

1.  The  thermostat. 

2.  The  system  of   wiving. 

3.  The  electric  bells  and  other  alarm  giving  devices. 
When  a  closed  circuit  system  is  used  a  transmitter  is  generally 

needed  in  addition  to  the  above. 

In  a  general  way  the  arrangement  is  as  follows  :  The  thermo- 
stats are  placed  througliout  the  plant  located  on  or  near  the  ceiling 
and  spaced  from  8  to  10  feet  apart.  In  the  older  equipments  the 
spacing  was  12  to  15  feet  apart  and  sometimes  more,  and  this  was 
satisfactory  in  plants  where  there  were  no  sprinklers.  Where  there 
were  automatic  sprinklers,  however,  it  was  found  that  the  thermo- 
stats should  be  located  near  the  sprinkler  heads,  for  otherwise  the 
heat  from  a  small  fire  might  strike  a  sprinkler  first  and  cause  it  to 
open — thus  cooling  the  thermostat  and  preventing  it  from  operating. 
So  the  rules  were  finally  changed,  requiring  the  same  spacing  as  for 
sprinklers. 

The  thermostats  are  connected  by  a  double  loop  system  of 
wiring,  there  being  a  separate  pair  of  loops  for  each  floor.  The 
loops  run  to  a  test  box  or  to  a  transmitter  and  also  connect  to 
an  annunciator.  In  an  outside  open  circuit  system  the  bells  are 
located  at  outside  points,  such  as  a  fire  department  house  or  a 
dwelling,  and  connect  to  the  inside  circuit  through  relays.  In  the 
older  equipments  no  relays  were  used,  but  the  outside  liells  were 
placed  on  the  main  circuit.  In  a  closed  outside  circuit,  the  tapper 
or  tape  machine  is  placed  at  an  engine  house  or  central  station  and 
the  box  number  is  sent  in  through  a  transmitter. 

Thermostats. 
Types  of  ]SIany  more  or  less  successful  thermostats  have  been  put  upon 

Thermostats.  []^g    market    but    they    practically    all    depend    upon    one      of     the 
following  principles  : — 

1.  Expansion  of  a  volatile  liipiid  in  a  closed  container. 

2.  Release  of  air  pressure  or  a  \  acuum  in  a  system  of  pipes 
by  melting  of  solder. 

3.  L'nequal  expansion  of  two  metals. 

4.  Expansion  of  mercury. 


AUTOMATIC  ALARMS 


205 


5.  Expansion  of  a  diaphragm. 

6.  Making  or  breaking  an    electric   circuit  by  the  melting  of 
soft  solder. 

7.  Expansion  of  air. 

]Witkins.  The  first  thermostat  of  this  type  consisted  of  a  'W'atkin? 
spiral  spring  composed  of  steel  and  brass  brazed  together.  One 
end  was  fastened  securely  to  the  base  and  the  other  end  was  free. 
When  heated  the  spring  tended  to  coil  up  and  the  motion  was 
taken  advantage  of  to  make  an  electrical  contact  and  thus  close  a 
circuit. 


Watkins  Thermostat,  I'^xtcrior  Mew 

This  device  has  undergone  many  developments  and  in  its  latest  form 
it  consists  of  a  spring  in  the  shape  of  the  arc  of  a  circle  inside  a 
perforated  metal  case.  The  spring  is  slotted  to  make  it  more 
sensitive  to  heat. 

United  States.      This  is  a  solder  release  closed  circuit   '-l^'^'ice.  United  States. 
It  consists  of  a  small  brass  ring  with  a  wire  soldered  to  opposite  sides 
by  soft  solder.      When   the   solder   melts,    the   ring   drops  out  and 
opens  the  circuit.      It  is  a  very  simple  and  reliable  device  and  has 
undergone  but  little  change  since  first  put  on  the  market.      It  is  still 


United  States  Thcnnostat 


used  to  considerable  extent  in  Boston,  some  of  the  new  equipments 
being  of  this  type  and  some  of  the  Watkins  open  circuit  type. 
These   thermostats   are   always    installed    in  pairs,  and    when   one 


206 


LECTURES  ON  FIRE  INSURANCE 


operates  a  troulile  signal  is  given.  The  same  signal  would  be  given 
if  any  wire  liecame  broken.  When  both  operate,  the  fire  signal  is 
sent  in. 

American.  American.      The  first  American  thermostat   consisted  of  a  U- 

shape  tube  with  a  long  closed  end  and  a  short  open  end.  The  lower 
part  of  the  tube  was  filled  with  mercury  and  the  upper  part  of  the 
closed  end  with  a  \olatile  liquid.  When  this  was  heated  the 
volatile  liquid  expanded,  causing  the  mercury  to  overflow  tlie  open 
end  and  make  an  electrical  connection  between  two  terminals  in  a 
cup  below.  This  de\  ice  was  easily  broken  and  was  subject  to  false 
alarms  when  shaken.  It  had  to  be  carefully  placed  in  an  upright 
position.      For  these  reasons  it  was  quite  unreliable. 

The  next  type  was  the  ether  tube,  which  consisted  of  a  hollow 
curved  tube  of  brass  partially  filled  with  ether.  It  operated  much 
like  the  Watkins,  as  when  it  was  heated  the  tube  tended  to 
straighten  out  and  thus  close  a  circuit.  In  the  first  tvpe  a  brass 
case  was  used,  but  in  later  types  fibre  and  porcelain  were  substituted. 
Tliis  device  was  subject  to  clogging  from  dust  and  corrosion. 
When  it  became  old  the  ether  was  very  likely  to  leak  out  and  thus 
make  the  thermostat  entirely  inoperative.  It  was  usuallv  set  to 
operate  at  about  150°  but  grew  more  sensitive  with  age.  It  was 
made  till  about  1900,  when  it  was  replaced  by  the  Woodman 
solder  release  thermostat.  A  great  manv  equipments  of  ether  tube 
thermostats  have  been  installed  in  New  England  and  thev  ha\e 
given  fairly  good  service.  While  many  of  these  still  remain,  they 
are  now  considered  defective  and  are  being  graduallv  replaced. 

Woodman.  Woodtfian.      This  consists  of  a  cup-shaped  piece  of  soft  solder 

set  in  a  porcelain  base  in  such  away  as  to  hold  two  contact  jDoints 
apart.  When  heated  the  solder  cup  fuses  and  a  spring  forces  the 
contact  points  together.  A  few  of  these  thermostats  have  given 
trouble,  owing  to  the  fact  that  they  were  not  carefullv  made,  and  in 
course  of  time  the  solder  cup  was  forced  out  of  its  support,  thus 
giving  a  false  alarm.  As  a  whole,  however,  this  thermostat  has 
given  good  results,  and  while  not  approved  by  the  National  Board 
of  Fire  Underwriters  it  may  be  considered  a  fairly  reliable  device. 

Heat  Alarm.  Heat  Alarm.      This  thermostat  was  built  upon  the  principle 

of  a  thermometer.  There  was  a  metal  cup  containing  mercurv 
and  two  small  brass  tubes  extending  from  this.  When  heated 
the  mercury  rose  in  the  tubes  and  completed  an  electrical  circuit. 
It  did  not  prove  a  reliable  device,  largely  on  account  of  j^oor 
design,  uneven  adjustments  and  clogging  of  mercury  bv  corrosion. 


AUTOMATIC  ALARMS  207 

It  was  also  somewhat  subject  to  false  alarms.      Nearly  all  of  these 
devices  have  now  been  replaced. 

Hersey.  This  was  a  solder  release  device  consisting  of  a  Hersey. 
small  metal  piston  soldered  into  a  hole  in  the  metal  case.  When 
the  solder  melted  a  spring  forced  the  piston  down  and  closed  a 
circuit  between  two  contact  points.  The  first  type  gave  trouble 
from  false  alarms,  as  there  was  not  a  large  enough  soldered  surface 
to  withstand  the  strain  of  the  spring.  Soft  solder  is  subject  to 
cold  flowing  when  under  tension,  and  in  the  course  of  a  few  years 
a  soldered  joint  if  not  properly  designed  is  liable  to  break.  In 
a  later  type  the  piston  fitted  too  closely  to  the  hole  and  gave 
trouble  from  sticking.  In  general  it  may  be  said  that  this  device 
though  good  in  principle,  was  not  well  designed.  It  is  now  con- 
sidered defective,  and  most  thermostats  of  this  type  have  been 
replaced. 

White.  This  was  a  solder  release  device  consisting  of  a  ■^j^^ite. 
coiled  spring  with  one  end  fixed  and  the  other  soldered  to  the 
case.  When  the  solder  joint  melted  the  spring  recoiled  and  made 
contact  between  two  triangular  shaped  points.  The  first  type 
was  not  sensitive  enough,  and  it  was  later  improved  by  insulating 
the  soldered  joint,  anil  also  by  replacing  the  wooden  case  with 
porcelain.  It  might  be  said  here  that  the  solder  used  in  all  these 
devices  is  practically  the  same  as  that  used  in  automatic  sprink- 
lers.* Great  care  is  needed  in  designing  a  device  of  this  kind  in 
order  that  it  will  operate  well  ahead  of  a  sprinkler.  If  the  sprink- 
ler should  operate  first  it  might  throw  water  onto  the  thermostat 
and  thus  cause  it  to  fail. 

Wall.  This  is  also  a  solder  release  device  that  superseded  Wall. 
the  White  about  1S99.  It  consists  of  a  thin  gold  plated  cap  on  the 
under  side  of  which  is  soldered  a  hook.  This  is  attached  to  a 
spring  which  holds  \.\yo  contact  points  apart.  When  the  solder 
melts  the  hook  is  pulled  off  and  the  circuit  closed.  This  was 
designed  to  be  proof  against  dust  and  corrosion.  No  moving  or 
soldered  parts  are  exposed,  but  the  heat  is  transmitted  through  the 
thin  metal  cap.  Later  it  was  made  more  sensitive  by  insulating 
the  gold  plated  cap  from  the  porcelain  case  by  means  of  a  fibre 
ring. 

This  device  was  quite  extensively  used   and   has  proved  very 


*Sprinkler  solder  consists  approximately  of    the    following:   bismuth 
4  parts,  lead  2  parts,  cadmium  1  pari,  tin  1  part. 


White  Com- 


208  LECTURES  ON  FIRE  INSURANCE 

satisfactory.      It  may  be  considered  to  l)e  about  on  a  par  with   the 
Woodman. 

The  White  Combination  sprinkler  and  thermostat  was  in- 
vented about  189-4  and  used  to  a  limited  extent.  It  was  at  first 
attached  to  the  Grinnell  sprinkler  only  but  a  few  were  made 
attached  to  the  International  head.  In  the  Grinnell  combination 
a  coiled  spring  is  used  of  a  similar  form  to  that  used  in  the  White 
thermostat.  One  end  is  fastened  to  the  frame  of  the  sprinkler  and 
the  other  end  to  the  sprinkler  strut.  The  thermostat  is  supposed 
to  fuse  before  the  sprinkler  and  usually  does  so  on  account  of  the 
small  amount  of  metal  that  has  to  be  heated  up.  If,  however,  it 
should  not  fuse  for  any  reason  it  is  sure  to  operate  when  the 
sprinkler  opens  on  account  of  the  fact  that  one  end  of  the  spring 
is  released  by  the  opening  of  the  head. 

This  was  an  expensive  system  to  install  and  gave  consider- 
able trouble  from  false  alarms,  owing  to  the  fact  that  the  device 
was  grounded  on  the  sprinkler  piping  and  grounds  were  liable  to 
occur  between  the  wiring  and  the  pipes.  Only  a  few  equipments 
were  ever  installed. 

This  covers  briefly  the  principal  devices  that  have  been  used 
in  New  England  and  only  brief  mention  will  be  made  of  the  other 
types. 
Other  Types.  IVestern.      A  closed   circuit  solder  release  device  built   for  a 

double   circuit   with    a  separate   fusible  element   for  each    circuit. 
Used  considerably  in  the  West. 

B7-azIeton  and  loxva  both  operate  on  the  principle  of  a  cir- 
cular diaphragm  moving  in  the  center  when  heated. 

Ludloxv  utilizes  a  chamlier  filled  with  bi-sulphite  of  carbon, 
which  when  heated  expands. 

Morse  depends  upon  the  movement  of  a  coiled  spring  which 
when  heated  expands.  This  is  the  same  principle  that  is  used  in 
the  so-called  .Standard  thermometer.  A  few  of  these  devices  were 
installed  in  New  England. 

Pneumatic^  a  solder  release  device.  When  solder  fuses  a 
spring  acts  on  a  piston  and  compresses  the  air  in  a  system  of 
piping  to  which  the  thermostat  is  connected.  This  pressure  acts 
on  a  diaphragm  which  is  arranged  to  give  an  alarm. 

Eco  Magneto  consisted  of  a  lead  pipe  with  small  holes  at 
frequent  intervals  plugged  with  soft  solder.  Air  was  exhausted 
from  the  pipes  and  when  a  plug  melted  the  pressure  was  equalized 
and  acted  on  a  diaphragm.      Now  obsolete. 


AUTOMATIC  ALARMS  209 

American  Glass  B7ilb.  This  consisted  of  ;i  small  glass  bulb 
mounted  on  a  porcelain  base.  Inside  the  glass  was  a  thin  pellet 
of  soft  solder  attached  to  a  hook  which  held  two  contact  points 
apart.  When  heated  the  solder  was  fused  by  heat  radiated 
through  the  glass  and  the  hook  then  pulled  away  from  the  solder. 

This  device  was  never  put  on  the  market,  although  it  seems 
to  have  possibilities. 

CopeuJiag'cn.  This  depended  upon  the  expansion  of  am- 
monia in  a  small  copper  vessel.  It  was  never  used  in  this  country 
so  far  as  is  known. 

^loiitaiik.  This  was  a  thermostatic  cable,  afterwards  made 
in  the  form  of  isolated  thermostats.  It  consisted  of  fine  copper 
wires  insulated  from  and  surrounding  a  core  consisting  of  a  larger 
copper  wire  surrounded  by  a  layer  of  soft  solder.  When  heated 
the  solder  fused  and  small  globules  of  solder  were  pushed 
through  the  insulation,  thus  short  circuiting  between  the  core 
wire  and  the  fine  wires. 

May  Oatzvay.  This  is  an  English  device  which  is  being 
used  to  some  extent  in  Canada  and  perhaps  certain  parts  of  this 
country.  It  consists  of  a  long  copper  wire  supported  on  a  steel 
frame.  Near  the  center  of  the  wire  is  a  weight  which  can  make 
contact  in  a  cup-shaped  receptacle.  When  heated  the  wire  ex- 
pands more  rapidly  than  the  frame  and  allows  the  weight  to  drop 
in  the  cup  and  close  the  circuit.  This  is  a  compensating  device, 
that  is,  it  operates  only  on  a  sudden  rise  in  temperature  and  does 
not  require  any  definite  point  of  temperature  to  give  an  alarm. 
It  is,  however,  subject  to  being  clogged  by  dust  and  corrosion. 

The  Underwriters' Laboratories  have  laid  down  certain  require-   Laboratory 
ments  that  a  thermostat  system  should  fulfill.     These  include  : —         Rules. 

1.  Must  be  set  to  operate  between  140°  and  164°  F.  for  low 
test  devices. 

2.  Must  operate  at  a  temperature  not  over  200°  F.  when  tested 
in  a  hot  air  oven  with  a  temperature  rise  of  50°  a  minute. 

3.  Must  be  of  a  permanent  contruction  that  will  not  dete- 
riorate. 

4.  Must  be  bug  proof  and  dust  proof. 

5.  Must  not  be  readily  affected  by  moisture  and  corrosion. 

6.  Must  not  be  liable  to  short  circuiting  due  to  moisture. 

7.  Must  not  have  adjustments  that  can  be  readily  tampered 
with. 


210 


LECTURES  ON  FIRE  INSURANCE 


8.  jMust  ha\e  a  good  wiping  or  scraping  contact  when  alarm 
is  given  by  electric  contact. 

9.  Must  not  be  injured  by  successi\e  heating  and  cooling 
below  normal. 

10.  Must  be  strong  and  not  easily  susceptil)le  to  mechanical 
injur}-. 

None  of  the  older  types  of  thermostats  entirely  fulfilled  these 
reciuirements  although  the  Montauk,  American  glass  bulb,  United 
States,  Woodman,  Wall  and  Watkins  could  probably  be  developed 
to  meet  them. 

The  New  England  Insurance  Exchange  had  approved  the 
Woodman,  Wall  and  Watkins,  at  the  time  the  Underwriters' 
Laboratories  began  testing  these  devices.  The  first  system  to  be 
approved  by  the  Laboratories  was  the  Aero,  submitted  b}-  Fred 
Thomas  of  Denver  in  1908.      In  1910  the   "compensating"  system 


m 

k 

flESSSmi    ^L.^ 

IL^- 

A 

/i 

r 

s 

• 

9 

1 

1 

Aero. 


Aero  or  Compensating  Thermostat 
A — Copper  Tubinif.     B — Wirinsj  fi'oni  Di:ipliratfni.     C — Diaphragm. 

submitted  bv  the  American  District  Telegraph  Company  was  ap- 
proved, and  in  1911  the  "  Air  alarm  "  submitted  by  the  Interna- 
tional Electric  Protection  Co.  passed  the  Laboratory  approval. 
Both  of  these  systems  are  similar  to  the  Aero  and  will  be  described 
under  that  name. 

Aero.     This  consists  of  a  small  copper  tulie  which  is  strung 
along  the  ceiling  so  as  to  conform  with  the   rules  for  thermostat 


AUTOMATIC  ALARMS  2U 

spacini^.  Each  loop  is  made  as  near  the  same  lenglh  as  possible, 
and  one  end  is  attached  to  a  diaphragm.  The  other  end  contains 
a  small  hole  or  "  leak  "  which  can  be  adjusted  in  size,  the  adjustment 
being  very  delicate.  When  heated,  the  air  in  the  tube  expands  and 
creates  a  pressure  on  the  diaphragm,  thus  making  an  electric  circuit. 
The  "leak"  is  adjusted  so  that  a  gradual  rise  in  temperature  will 
not  give  an  alarm,  as  the  air  will  slowly  escape  through  this  opening. 
Any  sudden  rise  of  temperature,  however,  will  create  enough  pres- 
sure in  the  tube  to  operate  the  diaphragm.  The  details  are  some- 
what complicated  and  will  not  be  described  here. 

The  device  is  very  sensitive  if  properly  adjusted,  as  it  does  not 
require  any  fixed  point  of  temperature  to  operate  it  but  depends 
upon  a  sudden  rise  whether  the  room  be  cold  or  hot  at  the  start. 
It  fulfills  the  requirements  of  the  Laboratox'ies,  but  in  practice  has  not, 
up  to  the  present  in  this  territory,  proved  as  successful  as  was  antici- 
pated on  account  of  the  diflicidty  of  getting  satisfactory  tubing  and 
of  keeping  it  in  proper  adjustment.  One  single  adjustment  affects 
a  whole  floor  circuit  instead  of  one  separate  thermostat,  as  in  most 
systems. 

Systems   of   Wiring 
There  are  three  distinct  methods  of  wiring  a  system. 

1.  Open  inside  and  open  outside  circuit. 

2.  Open  inside  and  closed  outside  circuit. 

3.  Closed  inside  and  closed  outside  circuit. 

The  inside  circuit  when  open  is  usually  installed  on  a  double  inside  Cir- 
loop  so  that  the  electric  current  will  have  two  paths  from  any  cuits. 
thermostat.  This  is  done  so  that  an  alarm  will  be  given  even  if 
one  wire  is  broken.  In  fact  there  can  be  two  breaks  under  certain 
conditions  without  crippling  the  system.  Each  loop  is  brought 
down  to  the  test  clock  and  arranged  so  that  it  can  be  tested  separ- 
ately. The  testing  device  automatically  throws  each  loop  succes- 
sively into  the  circuit  and  sends  a  current  through  it.  In  case  it  is 
intact  a  record  is  made  by  puncturing  a  dial.  If  any  particular 
loop  is  broken  no  puncture  will  be  recorded  for  that  loop.  The 
details  are  rather  complicated  and  will  not  be  described. 

The  floor  loops  are  also  connected  to  annunciator  usually 
placed  on  the  front  of  a  building,  and  when  a  short  circuit  occurs 
by  the  operation  of  a  thermostat  the  annunciator  drop  for  that  floor  is 
operated.  In  making  a  test  all  inside  wiring,  bells,  and  annunciator 
are  tested  except  that  where  outside  circuit  is  closed  the  transmitter 
is  cut  out  during  test. 


212 


LECTURES  ON  FIRE  INSURANCE 


Outside  Open  In  an  outside  open  circuit  system    the  outside  bells  were  for- 

Circuit.  merh  placed  in  the  main  circuit,  one  bell  beino^  a  vibrator  and  the 


other  bells  single  stroke,  vibrated  by  the  first  mentioned  "  master" 
bell.  The  disadvantage  of  this  method  was  that  if  one  bell  got  out  of 
order  the  whole  system  was  crippled.  The  vibrator  was  frequently 
placed  on  the  outside  of  a  building,  where  exposed  to  dust  and  cor- 
rosion and  was  frequently  found  out  of  order  on  this  accoimt. 
Bells  of  this  tvpe  are  very  easily  clogged  at  the  contact  points. 

A  few  systems  were  installed  where  the  outside  bells  were  in 


AUTOMATIC  ALARMS  2t3 


multiple,  and  while  this  was  a  somewhat  preferable  arrangement  in 
some  ways  it  took  a  stronger  current  to  operate  the  bells  and  was 
not  entirely  satisfactor}'. 

In  the  newer  systems  the  bells  were  all  put  on  relays  and  the 
condition  of  each  bell  was  shown  on  test  by  punctures  on  the  dial. 
If  any  bell  became  crippled  it  did  not  in  any  way  affect  the  other 
bells." 

A  few  systems  with  grounded  outside  circuits  ^vere  installed 
in  the  early  days,  but  they  were  extremely  subject  to  trouble 
fi-om  grounding  of  the  wire,  and  all  of  them  haye  probably  now 
been  changed  to  all  metallic  circuits. 

When  the  outside  circuit  is  closed,  a  transmitter  is  generally  Outside 
used.  This  is  a  device  that  is  wound  up  and  runs  by  clockwork.  Closed 
There  is  a  releasing  deyice  operated  by  an  electro-magnet.  When  Circuit, 
released,  a  wheel  revolves  ^yhich  makes  and  Incaks  the  outside  circuit 
either  Iw  notches  on  the  circumference  of  the  wheels  or  pins 
located  on  its  face.  The  cnitside  circuit  comes  up  to  the  wheel  and 
the  inside  circuit  up  to  the  electro-magnet  in  the  transmitter.  The 
outside  circuit  which  controls  several  equipments  runs  to  a  fire 
department  house  or  central  station  and  connects  with  a  '•'  striker" 
bell  or  tape  machine.  When  a  transmitter  operates,  the  box 
number  for  that  particular  risk  is  recorded  on  the  bell  or  tape 
machine.  The  outside  circuit  requires  constant  care,  for  the 
batteries  have  to  be  frequently  renewed.  A  break  in  the  line  will 
cripple  a  number  of  equipments,  so  that  it  has  to  be  carefully 
watched  and  repairs  made  without  delay.  The  rules  require  that 
this  line  be  tested  daily  and  that  a  small  bell  be  placed  at  the 
central  station  arranged  to  give  a  continuous  alarm  in  case  the  line 
breaks. 

The  outside  closed  circuit  system,  if  under  proper  maintenance 

gives  better  results   than  an    open   circuit,  and   is,  of   course,  quite 

necessary    in    cities    where    there    are  a  large  number  of  systems 

connected  to  one  station. 

In  testinof  a  system  with  outside  closed  circuit  it  is  customary   _     . 

. , ,  ,        i  csting. 

to  cut  out  the  transmitter  during  test  so  that  the  alarm  will  not  be 

sent  Into  the  station.  In  the  old  American  test  clock  this  is  done 
by  an  attachment  on  the  door  of  the  case.  This  was,  of  course,  a 
very  bad  arrangement,  as  the  door  might  easily  be  left  open  by 
mistake  and  thus  cripple  the  whole  outside  connection.  In  the 
later  type  of  boxes  this  was  done  automatically  by  the  testing 
mechanism  when  it  started  to  revohe,  and  restored  to  normal  con- 
dition when  the  test  was  completed. 


2J4  LECTURES  ON  FIRE  INSURANCE 

Systems  with  outside  and  inside  closed  circuit  are  never  used 
except  where  there  are  central  stations.  Practically  all  wires  are 
under  constant  test,  and  a  separate  signal  is  given  for  a  break 
than  for  fire.  The  details  are  complicated  and  will  not  be  con- 
sidered here. 

The  rules  for  all  t\  pes  of  svstems  which  are  approved  will  be 
found    in    the    pamphlet    on    Signalling    Svstems,    issued    bv     the 
National  Board  of  Fire  Underwriters. 
Systems  in  There  are  many  thermostats  svstems  in  New  England,  especially 

New  Eng-      in  Boston,    Lynn,    Brockton     and     Haverhill.      In  Boston  they  are 
land.  practically  all  of  the  Watkins  or  United  States  types.     The  wonder- 

ful success  of  the  Boston  systems  is  due  to  the  unusually  high  grade  of 
construction  and  maintenance  furnished  bv  the  Boston  Automatic 
Fire  Alarm  Co.  Outside  of  Boston,  the  majority  of  equipments 
are  the  American  eth^r  tube  or  solder  release  type.  As  a  general 
rule  they  have  given  good  results,  although  the  ether  tube  devices 
are  now  considered  defective. 

Practically  no  new  equipments  are  being  installed  in  this 
territory,  outside  of  Boston,  as  the  American  District  Telegraph  Co., 
which  controls  all  the  approved  devices,  find  it  dii^cult  to  get  new 
business  under  the  present  requirements  for  a  central  station  con- 
nection, and  prefer  to  put  in  sprinkler  svipervisory  and  central 
station  watchman's  serxice.  It  is  believed,  however,  that  a  good 
thermostat  s\stem  properly  installed  and  maintained  is  a  very 
desirable  form  of  fire  protection,  and  it  is  hoped  that  the  day  will 
come  when  this  form  of  protection  will  again  become  popular. 

QUESTIONS. 

1.  What  are  the  three  principal  parts  of  a  thermostat  system.? 

2.  State  the  more  important  principles  upon  which  the 
operation  of  different  tvpes  of  thermostats  are  based. 

3.  Give  the  qualifications  for  a  good  thermostat. 

4.  Describe  briefly  an  open  circuit  system  of  wiring. 

5.  Describe  the  Aero  system. 

BIBLIOGRAPHY. 

Crosby,  Fiske :      Handbook      of      Fire      Protection.      Ed.     1909. 

P.  192.      U.  S.  Patent  Records. 
Rules  of  the  National    Board    of    Fire  Underwriters    on  Signalling 

Systems. 


6— FIRE  DEPARTMENTS, 

Historical  Sketch. 

Modern  public  fire  departments  and  the  apparatus  they  use 
are  the  result  of  a  development  extending  over  many  centuries. 
There  were  firemen  called  matricularii  and  crude  pumps  in  the  time 
of  Pliny  in  the  first  century.  Pumping  engines  seem  to  have  been 
forgotten  during  the  dark  ages  and  squirts  or  portable  syringes  were 
the  only  devices,  excepting  of  course  buckets,  which  were  used 
until  about  the  sixteenth  century.  The  great  London  fire  of  1666 
probably  did  more  to  stimulate  improvements  in  public  fire  protec- 
tion than  any  other  single  event.  Flexible  hose  was  invented  by 
Von  der  Heide  in  Holland  about  1700,  but  was  not  extensively  used 
until  about  50  years  later. 

The  early  pumping  engines  wxre  similar  in  design  to  the  Early  Hand 
modern  hand  tub,  except  that  they  had  no  suction  or  discharge  Engines, 
hose.  There  were  two  cylinders,  each  with  its  piston.  The  pis- 
tons were  attached  to  a  horizontal  bar  pivoted  in  the  middle  so  that 
when  the  bar  was  moved  up  and  down  the  pistons  moved  up  and 
down  in  the  cylinders  and  forced  the  water  into  a  discharge  reser- 
voir. Water  had  to  be  supplied  to  a  reservoir  in  the  engine  with 
buckets  and  was  discharged  from  a  nozzle  attached  to  the  discharge 
reservoir. 

The  earlv  fire  brigades  in  London  were  maintained  entirely  by  Fire 
the  insurance  companies,  each  prominent  company  having  its  own  Brigades. 
brigade.  The  companies  placed  a  plate  or  sign  on  the  outside  of 
each  building  they  insured,  and  in  case  a  fire  occurred,  the  fire 
brigade  of  the  company  insuring  the  building  was  notified.  This 
method  finally  gave  way  to  public  fire  departments,  and  these  are 
now  almost  universally  found  throughout  the  world. 

The  first  fire  engine  operated  by  steam  was  built  by  George  Early  Steam 
Braithwaite  of  London  in  1829.      He  later  buik  several  others,  but   Engines. 


2J6 


LECTURES   ON  FIRE  INSURANCE 


Early  Steam   there  was  a  strong  prejudice  against  thciii  for  a  long  time  and  they 

Engines.  (jjj  ^ot  come  into  general  use  till  about  1S52.     The  first  American 

steam  fire  engine  was  built  by  Paul  R.  Hodge,  an  English  engineer, 


Braithwaite  Steam  Fire  Engine,  1S29. 


Hodge  Steam  Fire  Engine,  1S41. 


Silsbj  Steam  Fire  Engine,  1S56. 


in  New  York  in  1841.  This  also  was  not  popular  and  there  was 
great  difticulty  in  getting  any  fire  company  to  use  it.  In  1851  N. 
L.  Dav  of  Philadelphia  invented  the  first  self-propelled  engine,  and 
in  1852  Moses  Latta  of  Cincinnati  built  probably  the  first  really  suc- 
cessful engine.  These  early  types  of  engines  had  horizontal  pumps 
and  vertical  boilers.  About  1856  the  firm  of  Silsby,  Mynders  & 
Company,  of  Seneca  Falls,  N.  Y.,  put  out  the  first  engine  of  the 
rotary  type.  This  was  built  along  the  same  general  lines  as  a  ro- 
tary pump  for  mill  use,  but  had  a  rotary  steam  as  well  as  water 
end.  This  type  of  engine  was  popular  for  some  time,  but  has  now 
largely  gone  out  of  use.  In  1859  the  first  Amoskeag  engine  was 
built,  and  this  was  apparently  the  first  make  to  use  the  vertical  pum)>. 


FIRE  DEPARTMENTS 


217 


Modern  Steam  Fife  Engines, 

The  fire  engine  of  to-day  has  gone  through  a  wonderful  de- 
velopment since  the  crude  device  of  Braithwaite  in  1829.  The 
horizontal  type  of  pump  has  been  practically  discarded  and  the 
rotary  type  is  but  little  used.  The  modern  pump  is  double  acting, 
of  the  vertical  type,  usually  with  a  fly  wheel.  The  stroke  is  1"  to 
9"  and  the  revolutions  270  to  400  a  minute.  The  boilers  have  also 
been  greatly  improved  both  as  to  efHciency  and  simplicity  of  main- 
tenance. 

There  are  seven  principal  sizes  being  made; 


Size. 

Rated  Capacity. 

Double  extra  first 

size 

1 

,300 

gals. 

per 

minute. 

Extra  first  size 

1 

,100 

First  size 

900 

Second  size     . 

700 

Third  size 

600 

Fourth  size 

500 

Fifth  size 

400 

The  fifth  size  is  too  small  for  good  protection  and  is  not 
recommended.  The  great  majority  of  those  in  use  are  of  the 
first,  second  and  third  sizes,  and  the  second  size  is  probably  the 
most  generally  useful,  as  it  is  fairly  powerful  without  being  too 
heavy  for  average  conditions. 


Sizes. 


Metropolitan  Steam  Fire  Engine 
Made  by  American  La  France  Co. 


2t8 


LECTURES  ON  FIRE  INSURANCE 


Boilers. 


Horseless 
Engines. 


There  are  two  distinct  types  of  boilers,  the  fire  or  smoke  tube 
and  the  water  tube.  In  the  first  type,  the  tubes  are  phiced  inside  a 
boiler  containing  water  and  the  flame  and  heat  from  the  fire  passes 
through  the  tubes.  In  the  second  type  the  water  is  circulated 
through  a  system  of  pipes  around  which  the  heat  from  the  fire  is 
conducted.  The  boilers  are  from  30  to  40  inches  in  diameter  and 
from  60  to  70  inches  high,  depending  upon  the  capacity  of  the 
engine. 

A  few  horseless  engines  have  been  built  in  the  larger  sizes  in 
which  the  steam  from  the  boiler  is  utilized  to  propel  the  engine. 
These  are  of  necessity  slow  in  starting  unless  steam  is  kept  up  all 
the  time,  and  are  therefore  used  mostly  for  second  or  third  alarms. 
The  first  successful  one  was  built  about  1870,  and  they  ha^  e  been 
used  in  Boston,  Hartford.  Portland  and  Pittsburg. 


•'  Champion  "  Chemical  Tank,  Sectional  Mew. 
(Acid  relciised  bj'  revolving-  the  tank) 

Chemical  Eng^ines. 
Probably  nearly  half  the  fires  responded  to  by  most  cit}'  fire 
departments  are  extinguished  with  chemical  engines.  These  are 
constructed  on  the  same  principle  as  hand  chemicals.  There  is  a 
tank  containing  a  solution  of  bicarbonate  of  soda  in  water  and  a 
receptacle  for  sulphuric  acid.  In  some  of  the  smaller  sizes  the 
acid  is  in  a  bottle  and  the  whole  tank  is  revolved  on  a  vertical  axis, 
thus  emptying  the  acid  into  the  solution.  In  the  larger  sizes  the 
tank  is  usually  fixed  in  place  and  the  acid  receptacle  is  upset  by 
some  mechanical  device.  They  arc  built  in  various  sizes  from  35 
to  60  gallons  capacity  and  with  single  and  double  tanks.  They  are 
usually    equipped   with    agitators    consisting    of    a    rod    extending 


FIRE  DEPARTMENTS. 


219 


through  the  centre  of  the  tank  on  which  are  several  paddles.     This 
is  used  to  stir  the  solution  in  order   to  thoroughly  dissolve  the  soda. 
These  engines  are  usually   equipped  with   about  200   feet   of 
y^'  or  V  special  rubber  hose. 


Champion  Babcock  Chemical  Tank,  Sectional  View. 
(Acid  released  by  unscrewing  stopper  of  bottle) 

Combination    Wagons. 

Chemical  engines  ha\  e  been  combined  in  almost  endless  va- 
riety with  hose  wagons  and  ladder  trucks.  These  combinations 
form  a  desirable  type  of  apparatus,  provided  the  chemical  tanks  are 
of  large  enough  capacity,  and  are  especiallv  popular  in  small 
cities  where  the  apparatus  must  be  somewhat  limited  in  amount. 


Fire  Boats. 

In  the  larger  cities  having  an  extensive  water  front,  tire  boats  Specially 
are  a  very  important  part  of  the  fire  fighting  equipment.  At  first  Designed, 
scows  or  old  tug  boats  were  used  for  this  purpose,  but  to-dav  the 
boats  are  carefully  designed  for  the  purpose.  They  are  from  80  to 
130  feet  in  lengths  of  light  drafts  and  preferablv  with  twin 
screws.  They  are  fitted  with  large  pumps,  having  a  total  capacity 
of  from  3,000  to  13,000  gallons  per  minute.  The  pumps  are  usu- 
ally of  the  vertical  type,  though  horizontal  and  rotary  pumps  have 
been  used.  Of  late  centrifugal  pumps  have  come  into  use  for  this 
purpose.      The  water  is  discharged  through  hose  streams   and  also 


220  LECTURES  ON  FIRE  INSURANCE. 


through  monitor  nozzles  or  deck  turret   nozzles,  some  of  which  are 
as  large  as  5^4 "  in  diameter. 


Hose  Wagons 

Reels.  The  old  form  of  hose  wagon  consisted  oV  a- large  reel   mounted 

on  an  axis  and  upon  which  a  large  number  of  hose  lengths  coupled 
together  could  be  wound.  These  ha\e  now  lieen  almost  entirelv 
replaced  by  hose  wagons  where  the  hose  is  not  coupled  together  but 
laid  in  folds  or  coils.  This  latter  method  has  been  found  much 
more  convenient  under  average  conditions  and  has  the  added  ad- 
vantage that  the  wagon  can  be  used  for  carrving  hand  chemicals 
and  other  minor  equipment.  It  might  seem  at  first  glance  that  the 
hose  would  wear  better  when  placed  on  a  reel,  but  as  a  matter  of 
fact  this  is  not  so.  In  the  central  part  of  a  reel  the  hose  is  under 
considerable  pressure  from  the  coils  above  it  and  the  couplings  are 
apt  to  seriously  indent  it.  When  placed  in  folds,  there  are  of 
course  sharp  bends,  but  if  the  hose  is  used  occasionallv  it  is  not 
likely  that  the  bend  will  come  twice  in  exactlv  the  same  position. 
Most  of  the  modern  hose  wagons  are  of  the  combination  tvpc  con- 
taining hand  chemicals,  ladders,  and  frequentlv  large,  chemical 
engines. 

Hose 

Sizes  The  best  hose  for  fire  department  use  is  generallv  conceded  to 

Desirable.  be  of  the  2i4"  rubber-lined  cotton  jacket  type.  An  all  rubber  hose 
is  heavier  and  does  not  last  anv  longer,  if  as  long.  It  is  most  often 
used  in  the  down  town  districts  of  large  cities  where  the  fires  are  so 
frequent  that  there  is  not  time  between  fires  to  properlv  drv  cotton 
rubber-lined  hose.  Unlined  linen  hose  has  too  much  friction  loss. 
Larger  sizes  of  hose,  namely,  3"  and  oj^",  are  occasionallv  used,  es- 
pecially for  fire-boat  work,  and  are  recommended  in  large  cities,  as 
the  friction  loss  is  much  less  than  in  2  ^4'' hose.  Aline  of  S^'^" 
hose  is  about  equivalent  in  carrying  capacitv  to  two  lines  of  2}^" 
hose,  and  therefore  gives  a  great  sa\  ing  where  long  lines  have  to  be 
used.  It  is,  however,  too  large  and  heavv  to  be  used  inside  of 
buildings,  and  should  be  limited  to  out-of-doors  runs.  It  is  very 
desirable  to  use  the  standard  2^4"  couplings  on  both  8"  and  3)4" 
hose,  so  that  they  can  be  readily  attached  to  the  smaller  hose  when 
necessary.      The  extra  friction  loss  in  these  cou])lings  is  verv  slight. 


FIRE  DEPARTMENTS 


22J 


Play  Pipes 

The  standartl  playpipe  is  of  brass,  with  a  smooth  tapered  interior, 
wountl  with  conl.  and  with  swivel  handles.  The  best  size  of  out- 
let for  general  use  is  Iji".  Fire  departments  frequently  use  smaller 
nozzles  of  from  ^"  to  J"  diameter,  especially  where  water  pressure 
is  weak,  but  they  give  much  less  poweiful  streams.  Larger  nozzles 
are  used  in  the  large  cities  especially  in  connection  with  deck  guns 
and  deluge  sets.  Shut  off  nozzles  are  desirable  in  small  fires  for 
use  of  buildings,  but  the}'  cause  an  increased  friction  loss  and  do  not 
give  as  solid  a  stream.  vSpray  and  other  special  nozzles  have  a 
limited  lield  for  use. 


Underwriter"   Plaj  Pipe 


Hose  Coupling,  Sectional  \'iew 


Couplings. 

The  screw  form  of  coupling  is  now  almost  universallv  used.  Standard 
although  several  forms  of  snap  or  clasp  couplings  were  formerly  Couplings, 
popular.  There  is  unfortunately  a  great  variety  of  screw  threads 
used  for  this  purpose  and  this  has  caused  much  delay  and  serious 
consequences  many  times  when  apparatus  has  been  called  from 
other  cities  in  case  of  a  large  tire.  About  ten  years  ago  the  National 
Fire  Protection  Association  appointed  a  committee  to  in\  estigate  this 
matter,  and  after  a  very  careful  study  thev  recommended  a  standard 
coupling  to  consist  of  7j4  threads  to  the  inch  and  an  outside  diam- 
eter of  3J^".  It  was  found  that  this  would  tit  the  largest  number  of 
couplings  then  in  use,  as  almost  any  coupling  having  between  7  and 
8  threads  to  the  inch  can  easily  be  made  to  conform  to  it  by  a  little 
tiling. 

This  was  adopted  as  a  National  standard,  and  is  being  gradually 
introduced  into  all  large  cities  of  the  country.  The  introduction 
has  been  slower  than  it  should  have  been,  however,  as  the  cost  and 
trouble  of  making  the  change  is  in  most  cases  very  small. 


222  LECTURES  ON  FIRE  INSURANCE 

Ladder  Trucks 

Types  of  There  are  many  types  of  ladder  trucks  on  the  market,  ranging 

Trucks.  from  the  seventh  size,  carrying  85  feet  extension  ladders,  to  the  first 

size,  carrying  65  feet  extension  ladders.  The  larger  trucks  are  quite 
complicated  and  usually  require  a  special  device  for  steering  the 
rear  wheels  so  that  the  apparatus  can  take  short  corners.  In  the 
larger  cities  aerial  trucks  are  necessary,  and  these  run  in  size  from 
50  to  85  feet  when  extended.  The  larger  ones  are  raised  mechani- 
callv  either  bv  heavy  springs  or  by  pneumatic  power. 

Water  Towers 
These  consist  of  extension  standpipes  with  an  adjustable  nozzle 
on  the  top,  and  which  can  be  raised  vertically  to  a  height  of  from 
55  to  65  feet.  Hose  streams  are  connected  to  the  base  of  the  tower, 
supplied  bv  steamers.  The  nozzle  can  be  controlled  from  below 
and  a  powerful  stream  at  any  desired  elevation  thus  maintained. 

Miscellaneous  Apparatus. 
The  following  apparatus  which  is  found  in  the   larger  depart- 
ments will  not  be  described  : — 
Searchlight  wagons. 
Fuel  wagons. 
Wrecking  wagons. 
Battery  wagons. 
Chief's  wagons. 

Automobile  Apparatus 
piy-j,  Nearly  all  kinds  of  fire  departments  apparatus  is  now  being  made 

Squadrons,  of  the  automobile  style.  Springfield,  Mass..  was  one  of  the  first 
cities  to  adopt  a  combination  automobile  truck,  generally  known  as 
a  flving  squadron.  This  usually  consists  of  a  small  chemical  en- 
gine, a  few  ladders  and  accommodations  for  six  to  ten  men.  Fre- 
quentlv  a  supply  of  21^"  hose  is  also  added.  The  idea  is  to 
transport  a  good  force  of  men  with  the  necessary  apparatus  to  fight 
a  small  fire  to  the  scene  of  trouble  as  quickly  as  possible.  The  dy- 
ing squadron  has  already  become  very  popular  and  is  being  exten- 
sively used,  especially  in  sparcely  settled  districts. 

During  the  last  few  vears  rapid  strides  have  been  made  in  the 
development  of  automobile  engines  and  ladder  trucks.  One 
company  is  building  gasolene  engines  of  the  rotary  type  in  three 
sizes,   namely,   400,    600  and   800   gallons  per   minute.     The  two 


HRE  DEPARTMENTS 


223 


z 

3 

w 
u 

I— I 

u 
a: 
u 

z 
-< 

z 

o 
o 
< 


w 

O 
X 

z 

3 
z 

w 

w 


O 
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z 
o 

z 

o 


224  LECTURES  ON  FIRE  INSURANCE 


Automobile     latter  are  six   cylinder   machines  of   96  and  110  h.p.    respective!}'. 

iingmes.  They  are  also   building  gasolene  piston  engines  in    larger    sizes, 

namely,  (SOO,  1000  and  1200  gallons  per  minute.  These  are  six 
cylinder  machines  ranging  in  horse  power  from  110  to  150.  At 
present  these  pumps  have  not  been  developed  to  a  point  where  they 
can  be  considered  entirely  satisfactory.  The  capacity  of  many 
of  them  are  overrated  and  most  of  them  have  defects  which  develop 
during  long  or  hard  service. 

Horse  drawn  engines  are  now  being  converted  into  automobile 
apparatus  by  removing  the  front  wheels,  seat,  etc.,  and  replacing 
with  a  two  wheel  automobile  truck.  It  is  probable  that  automobile 
apparatus  will  come  into  more  and  more  general  use  and  finally 
supplant  all  horse  drawn  apparatus.  It  has  a  tremendous 
advantage  in  the  matter  of  speed  and  is  probably  cheaper  to 
maintain,  although  the  first  cost  is  at  present  much  higher.  With 
this  type  of  apparatus  in  general  use  it  seems  likely  there  will  be 
important  changes  in  the  organization  of  fire  departments  and  the 
distribution  of  apparatus,  for  with  an  engine  that  can  traA  el  50 
miles  an  hour,  much  greater  distances  can  be  covered  than  at 
present.  It  is  possible  that  the  heavy  snows  of  our  northern  cities 
may  interfere  somewhat  with  automobile  apparatus,  but  it  is 
probably  only  a  matter  of  time  when  this  problem  will  be  success- 
fully solved.  Greater  skill  is  required  to  keep  automobile 
apparatus  in  good  order  than  is  required  for  horse  drawn  appa- 
ratus, and  it  is  believed  that  it  has  not  yet  reached  that  state  of 
perfection  where  it  can  be  recommended  in  all  cases  to  the 
exclusion  of  the  older  and  simpler  aj^paratus. 

Department  Organizations. 

Types.  Fire  departments  ha\e  been  developed  in  different  cities    to 

meet  local  needs.     New  York  with  its  department  of  over  4,00(1 

men  naturally  has  a  different  form  of  organization  than   smaller 

cities.     There  are  three  radically   different  forms  of  organization. 

1.  Volunteer  men. 

2.  Part  paid  men. 

3.  Fully  paid  men. 

While  the  greater  proportion  of  the  firemen  in  the  country 
are  probably  volunteers,  still  this  type  is  not  desirable  in  the  large 
cities.  \  olunteers  can  never  be  properly  drilled  and  therefore 
cannot  handle  the  apparatus  to  best  advantage.  It  is  difticult  to 
keep  them  all  interested  in  their  work,  and  there  is  no  way  of 
making  them  go  to  a  fire  if  they  do  not  want  to.      While  they  may 


FIRE  DEPARTMENTS  225 


be  necessary  in  the  smaller  towns  it  is  always  desirable  to  replace 
them  with  paid  or  partly  paid  men  when  possible.  Call  or  part 
paid  men  were  formerly  considered  desirable  for  a  portion  of  the 
force  in  the  larger  cities.  To-day,  however,  the  tendency  is  to  haxe 
all  fully  paid  men,  as  it  is  believed  that  a  moderate  number  of  such 
men  thoroughly  trained  are  superior  to  a  much  larger  number  of 
less  efhcient  call  men.  The  modern  automobile  apparatus  also 
tends  to  eliminate  call  men,  as  it  allows  for  much  more  concentra- 
tion of  apparatus  than  was  formerly  possible. 

Departments  are  generally  organized  with  a  chief,  one  or  more  Organization, 
deputy  chiefs,  depending  upon  the  size  of  the  city,  district  chiefs, 
and  company  officers.  In  the  larger  departments  there  are 
medical  officers,  supervising  engineers,  chaplains,  etc.  There 
should  always  be  enough  men  in  a  company  to  give  a  good  fighting 
force,  even  at  the  times  when  the  greatest  number  are  away  at 
meals.  In  towns  of  less  than  1000  inhabitants  nothing  but  a 
volunteer  department  is  usually  practical.  In  towns  of  from  1000 
to  10,000  there  should  be  a  paid  chief,  a  number  of  paid  or  part 
paid  men.  It  is  desirable  to  pay  all  the  men  a  little,  even  though 
it  is  onlv  50  cents  each  time  they  are  called  out.  In  this  way  they 
can  be  induced  to  drill  more  frequentlv  and  in  general  the}'  feel 
more  responsible.  In  cities  of  100,000  population  and  o^  er  only 
fullv  paid  departments  are  recommended. 

Supervision* 

In  the  larger  cities  the  fire  departments  are  generally  supervised   In  Cities 
by  a  commission   of   three   or  a    single   commissioner.      The   latter   ^""  towns, 
seems  to  be  the  more  successful  except  in  places  where  politics  get 
into  the  department  and  first  class  men  are   not  appointed   for   the 
position. 

In  smaller  cities  and  towns  the  department  is  often  supervised 
by  a  committee  from  the  board  of  aldermen  or  the  board  of  select- 
men. 

Cost  of  Departments. 

Boston  has  one  of  the  most  expensive  departments  in  the 
country,  costing  considerably  over  $'2  a  head  for  every  citizen.  In 
New  York  and  Chicago  the  cost  is  between  $1  and  $2  per  capita 
and  in  most  of  the  smaller  cities  it  is  less.  A  majority  of  the  towns 
of  10,000  inhabitants  spend  less  than  50  cents  per  capita  to  support 
the  fire  department.  The  recent  conflagrations  in  some  of  the 
smaller  towns  show  the  shortsightedness  of  such  a  policy. 


226  LECTURES  ON  FIRE  INSURANCE 

QUESTIONS. 

1.  Describe  briefly  a  modern  steam  fire  engine. 

2.  What  are  the  three  types  of  pumjDs  that  ha\e  been  used  in 
steam  fire  engines  ? 

3.  What  are  the  sizes  of  steam  fire  engines  now  being  made? 

4.  Describe  a  cliemical  engine. 

5.  State  the  essential  features  of  a  fire  boat. 

6.  How  is  hose  usually  carried? 

7.  What  kind  and  size  of  hose  is  mostly  used  by  fire  depart- 
ments ? 

8.  What  is  the  National    Standard   hose   coupling  and   what 
couplings  can  be  made  to  fit  it? 

9.  What  is  a  "  flying  squadron?" 

10.  What  is  your  opinion  of  automobile  fire  engines  ? 

11.  Do  volunteers  usually  make  good  firemen?      If  not  why? 

12.  Describe  briefl}'  the  organization  of  a  fire  department  in 
a  large  city  ? 

BIBLIOGRAPHY. 

Crosby-Fiske  :   Handbook  of  Fire  Protection.      Seepages  125,  495, 

1899.      Insurance  Field  Co.,  Louisville,  Ky. 
Curtis,   Greely   S.  :     Municipal  Fire  Departments.      National  Fire 

Protection  Association  Qltarterlv,  January,  1906  :    293. 

-Ec[uipment  of  Fire  Departments.  Insurance  Engineer- 
ing, January,  1906.     P.  38. 
Jenness,    H.   T.  :      Bucket  Brigade  to  Flying  Squadron.     147  p. 

Boston,  1906  (Geo.  H.  Ellis  Co.). 
Johnson,   W.    H.  :     Town    Fire    Departments.      Inszirance    En- 

gineering,  August,  1909  :      98. 
King,  Wm.  T.  :   History  of  American  Steam  Fire  Engine  :   150  p., 

1896.      Published  by  the  author. 
Lindback.    A.  :      The   Fire  Commissioner's  Oftice.     National  Fire 

Protection  Association    (^itakterly,   April,    1910 :     414. 

,  Engineering  Alag'azine,  February,  1912. 

New  England  Water  Works  Association  Journal,  December,  1894  : 

93. 
Tryon,  Jas.  E.  :     What    a    Water  Supply  Engineer   can  do  in  the 

Fire  Department.     New  England   Water  Works  Association 

Journal,  December,  1894:  93. 
Young,    Chas.    F.    T.  :     Fires,  Fire   Engines  and  Fire   Brigades. 

534  p.     London,  1866  (Lock wood  &  Co.). 


PUMPS 

Fire  pumps  are  used  in  tire  protection  to  supply  water  for  hose  Uses  of  Fire 
streams,  for  inside  hose  and  for  sprinklers.  They  are  particularly  Pumps, 
desirable  in  country  risks  or  other  places  where  there  is  weak  or  no 
public  water  supply.  A  pump  arranged  in  a  standard  manner  with 
ample  power  available,  safely  located  and  with  an  ample  water 
supply  behind  it,  is  the  best  fire  fighting  machine  we  have  to-day. 
In  one  or  two  minutes  time  the  water  from  a  pond  or  river  may  be 
projected  onto  a  lire  at  a  pressure  of  100  lbs.  or  more.  Of  course 
some  judgment  must  be  used  as  to  where  tire  pumps  are  recom- 
mended, as  they  must  be  under  the  care  of  trained  mechanics  to  be 
thoroughly  efficient  for  fire  fighting  purposes. 

Gi^en  a  reliable  and  well  located  water  wheel  or  boiler  plant, 
a  large  pond  or  river  and  two  or  three  good  engineers  or  mechanics, 
a  risk  can  in  no  way  be  better  pro\ided  with  fire  streams  than  by 
the  installation  of  a  National  Standard  fire  pump  of  proper  capacity. 

The  streams  are  directly  under  the  control  of  the  assured's 
men  who,  being  familiar  with  the  plant  will  usuall}-  utilize  them 
wdiere  most  needed.  Nor  can  the  pri\ate  protection  be  impaired  by 
fires  outside  the  plant  as  can  a  public  water  supply  under  the  con- 
trol of  the  fire  tlepartment. 

A  standard  fire  stream  delivers  as  much  water  as  is  used  bv  a 
population  of  5,000  people  for  their  average  uses,  exclusive  of  water 
for  fire  purposes.  A  4  stream  or  1,000  gallon  pump  (the  size  most 
common)  therefore  represents  a  \vaterworks  supply  designed  for  a 
delivery  sufficient  for  the  domestic  consumption  of  a  town  of 
20,000  people. 

Places  are  few,  even  in  a  city  with  a  good  water  supply,  where 
w^e  could  build  a  mill  and  make  certain  that  the  public  water  supply 
could  furnish  us  with  1,000  gallons  a  minute  at  100  lbs.  pressure 
for  fire  purposes.  Yet  this  is  the  ordinar^•  and  expected  work  of 
the  Underwriter  fire  pump. 

Fire  departments  often  use  ^^ ,  ^  or  1  inch  nozzles  and  we 
thereby  get  a  wrong  impression  of  the  capacity  of  say  a  6  inch  street 
main,  as  it  appears  to  be  furnishing  a  large  number  of  streams.  But 
a  standard  1^-^-inch  stream  discharges  over  twice  as  much  water  as 


228  LECTURES  ON  HRE  INSURANCE 

a  ^-inch  stream  under  the  same  conditions,  and  if  the  fire  depart- 
ment should  use  the  standard  streams  they  would  have  to  greatly 
reduce  their  number.  A  new  1,000  gallon  Underwriter  pump  can 
deliver  8  or  10  ^-inch  streams  such  as  are  used  by  the  average  fire 
department  in  a  town  or  small  city.  These  remarks  are  not  so  much 
to  disparage  public  water  service  as  to  point  out  the  value  of  a  good 
pump. 

Pumps  are  not  good  for  primary  supplies  to  sprinklers  in 
private  risks,  as  they  are  uneconomical  to  run  continually  and  if  so 
run  are  apt  to  become  worn,  continually  needing  repairs.  A  fire 
might  occur  when  making  repairs  with  disastrous  results. 

Pumps  are  best  held  in  reserve  in  operative  condition  so  they 
may  be  started  at  full  speed  at  once.  A  tank  or,  if  available,  public 
water  should  be  used  for  a  primary  supply,  which,  although  weak, 
can  at  least  hold  the  fire  from  spreading  for  a  few  minutes  until  the 
pump  can  be  started. 

Night  watchmen  and  others  in  charge  should  he  trained  to  start 
the  pump  at  the  first  sign  of  fire  and  with  the  pump  maintain  80  to 
100  lbs.  on  all  the  fire  apparatus  to  which  the  pump  may  be 
connected. 

_  ,  There  are  three  general  types  which  are  standartl. 

1  ypes  oi  .  . 

Standard  Fire  Stea???.      Directly  driven  by  steam  acting  on  reciprocating  pis- 

Pumps,  tons  on  the  opposite  end  of  which  are  plungers  or  pistons  which 

displace  water  at  each  stroke,  the  direction  of  the  water  being 
governed  by  self-acting  valves. 

Rotary.  Revolving  and  intermeshing  cams  forming  buckets 
or  cavities,  which  by  displacement,  give  a  moi'e  or  less  positive  dis- 
charge with  a  fairly  high  velocity.  Driven  by  water  power  usually. 
Engines  and  motors  are  also  used.  The  pump  is  connected  to  its 
source  of  power  by  shafts,  clutch  or  friction  wheels. 

Centrifugal.  High  speeded  revolving  impellers  create  high 
A'elocity  in  the  water,  which  velocity,  bv  means  of  properly  designed 
passages,  is  then  reduced,  appearing  as  pressure.  Driven  usually 
by  directly  connected  motors. 

Pozvcr  Pumps.  (No  Underwriter  pattern) .  Two  or  more 
plungers  operated  by  gearing  through  a  suitable  crank  shaft. 

HISTORICAL 

Steam  Steam   fire  pumps  of  the  direct  piston  type  were  first  built   in 

Pumps.  1840.      The   first   pumps    were    of    the    single    piston    type.     The 

duplex  type,  first  made  in  1850  or  1860  was  patented  by  Henry  R. 


PUMPS  229 

VVorthington.     It  was  generally  copied  upon  the  expiration  of  the   Steam 
patent.  Pumps. 

The  Underwriter  steam  pump  design  was  first  developed  by 
John  R.  Freeman,  at  that  time  engineer  for  the  Factory  Mutuals, 
the  work  being  started  about  1890.  The  steam  pumps  in  use  as 
fire  pumps  up  to  that  time  were  very  unreliable.  Through  com- 
petition the  duplex  pumps  had  become  so  cheaply  built  as  to  fail  by 
breakage  at  fires  and  when  tested.  Their  designs  were  mostly  on 
the  lines  of  the  regular  trade  pumps,  with  slight  alterations  made  in 
the  patterns  and  parts  to  enable  the  pumps  to  be  run  at  higher 
speeds  for  fire  purposes.  Little  attention  was  given  to  rust-proof- 
ing. Suction  inlets,  valves,  water  passages,  etc.,  were  restricted  in 
size,  so  that  the  pumps  were  more  or  less  inefficient  as  pumping 
engines.  A  common  suggestion  of  the  old  days  which  the  inspec- 
tors found  necessary  was  one  requiring  a  crow-bar  to  be  kept  near 
the  steam  pump  to  start  it  in  case  of  fire.  The  pump,  not  being 
rust-pi'oofed,  corroded  in  its  moving  parts  so  as  to  need  the  bar  to 
keep  it  moving  for  the  first  few  revolutions. 

The  rotary  fire  pumps  were  more  reliable  than  the  steam  pumps   Rotary 
and    gave    fairly    good    ser\ice.      It  was   not   until    1906   that   the  Pumps. 
National  Standard  rotary  pump  was  designed,  and  except  for  desir- 
able accessory  fittings  and  more  thorough  rust-proofing,  this  style  of 
pump  remains  about  as  originally  designed. 

Rotarv  pumps  were  probably  the  first  ones  used  in  this  vicinity 
for  fire  protection,  as  in  the  early  days  the  only  available  power  was 
usuallv  water  power. 

The  undesirable  features  of  these  old  rotary  pumps  were  their 
poor  location  and  the  poor  arrangement  of  their  power  drives.  The 
pumps  were  usually  located  near  the  water  wheels  under  the  mill, 
a  place  more  or  less  inaccessible  and  a  place  where  freezing,  rust- 
ing and  neglect  of  oiling  would  all  tend  to  impair  the  value  of  the 
pump  as  a  fire  fighting  machine.  Often  there  was  not  power 
enough  to  run  both  the  mill  shafting  and  the  pump,  and  no  means 
were  provided  to  throw  out  the  shafting  so  the  wheels  could  put 
all  their  power  into  the  operation  of  the  pump. 

I  remember,  as  not  uncommon,  the  suggestion  on  inspection 
reports  that  a  large  carving  knife  be  kept  hung  up  near  the  main 
belt  so  that  in  case  of  fire  the  knife  could  be  used  to  cut  the  main 
belt,  thereby  allowing  the  fire  pump  to  be  operated  without  running 
the  whole  mill.  It  of  course  is  desirable  to  shut  down  a  mill  in 
case  of  fire  to   prevent  the  belts  from   spreading  fire  and  water. 


230 


LECTURES  ON  FIRE  INSURANCE 


Rotary  Although   this  suggestion   of   a   carving  knife  is  obsolete,  it  is  still 

Pumps.  applicable  to  many  old  equipments  and  would  not  be  at  all  out  of 

place  as  an  item  worthy  of  attention  in  some  of  our  risks  to-day. 

Such  an  arrangement  of  a  rotary  pump  makes  it  necessary  to 
enter  the  mill  to  get  the  pump  under  way  and  to  oil  it.  In  case  of 
fire  near  the  pump  it  of  course  would  be  inaccessible  and  could  not 
be  started. 

It  is  due  to  such  defects  in  location  and  power  that  rotary 
pumps  have  a  somewhat  unfortunate  reputation.  The  pump  itself 
is  simple,  efficient  and  reliable,  and  if  the  same  mechanical  skill  and 
attention  to  the  elements  of  good  fire  protection  engineering  are 
employed,  as  is  done  in  the  case  of  steam  fire  pumps,  the  protection 
furnished  by  the  rotary  pump  would  be  superior,  other  things  being 
equal. 

There  are  old  rotary  pumps  in  ser\  ice  to-day  40  to  .50  years  old 
that  can  deliver  oO  to  TO'y^  of  their  original  rated  capacity.  Most 
steam  lire  pumps  which  were  made  at  this  time  passed  to  the  junk 
heap  10  to  20  years  ago. 

The  best  methods  of  driving  rotary  pumps  will  be  taken  up 
later. 


STANDARD  FIRE  PUMPS 

Steam  Steam   pumps   are  often  poorly  arranged.      Their  steam   sup- 

Supply,  ply  may  be  taken  from    pipes  used   for  steam  for  other  purposes, 

making  the  steam  supply  likely  to  be  shut  off  for  repairs  or  other- 
wise impaired. 

Boilers  furnishing  steam  for  the  fire  pump  were  often  so  located 
that  it  would  be  impossible  for  men  to  stay  at  the  boilers  to  keep  up 
the  firing  in  case  of  a  bad  fire  in  the  plant.  There  are  many  such 
to-day.  As  no  chain  is  stronger  than  its  weakest  link,  so  no  steam 
fire  pump  can  be  better  than  its  steam  supply.  This  is  an  important 
fact  which  often  does  not  receive  proper  attention. 

A  safe  steam  supply  implies  good  boilers,  ample  in  capacity 
and  capable  of  being  forced  to  an  o\erload  if  necessary  ;  a  safe 
location  cut  off  or  detached  from  inflammable  rooms  and  buildings. 
The  cut-off  must  not  only  exclude  fire  but  must  not  permit  smoke 
to  enter  in  sufficient  quantities  as  to  dri\  e  firemen  from  the  boilers. 
It  also  implies  safe  arrangements  of  steam  pipes.  All  pipes  leaving 
the  boiler  room  should  be  provided  with  valves  so  that  in  case  of 
leakage  or  breakage  of  steam  pipes  in  a  burning  building  the   pipe 


PUMPS  231 

can  be  shut  off  and  all  steam  reserved  for  the  lire  pump.  Safety 
also  demands  two  independent  sources  of  boiler  feed  water,  each 
ample  and  reliable.  No  steam  pump  can  be  called  good  which  is 
supplied  with  but  a  single  boiler,  as  when  this  boiler  is  undergoing 
its  yearly  inspection  it,  of  course,  is  cold  and  the  pump  could  get 
no  steam. 

Fire  pumps  should  be  so  arranged  as  to  minimize  the  amount  Pump 
of  lifting  necessary  for  them  to  get  the  water  into  the  chambers.  Supplies. 
Pumps  can  not,  strictly  speaking,  lift  water.  All  they  can  do  is  to 
exhaust  air  from  the  suction  pipe,  which  permits  the  atmospheric 
pressure  on  the  pond  or  river  to  force  the  water  to  the  pump. 
Pumps  usually  run  a  little  smoother  at  high  speeds  if  there  is  a 
slight  lift,  the  pump,  for  example,  being  placed  about  two  or  three 
feet  above  the  surface  of  its  water  supply.  A  slight  head,  however, 
where  water  flows  to  the  pump  by  gravity  insures  reliability  in 
starting,  as  the  pump  can  be  kept  always  primed. 

A  fire  pump  should  not  have  over  15  feet  lift,  preferably 
much  less.  If  necessary  pumps  should  be  put  in  rooms  sunken  in 
the  ground  to  get  them  down  to  the  proper  level  rather  than  to  have 
them  located  far  above  their  water  supply. 

Long  suction  pipes  should  be  avoided.  If  the  pump  cannot  be  Suction 
located  near  the  main  supply,  the  water  can  be  conducted  by  gra\  itv  Pipes. 
through  a  flume,  penstock  or  large  pipe,  to  a  special  suction  well 
located  at  the  pump.  The  gravity  supply  pipe  should  be  designed 
to  give  a  flow  in  excess  of  the  possible  maximum  capacity  of  the 
pump,  so  that  the  suction  well  will  be  kept  full.  If  skill  is  used  it 
is  generally  possible  to  avoid  the  use  of  foot  \al\es  on  suction  pipes. 
These  are  undesirable  and  should  be  only  used  as  a  last  resort. 
Suction  pipes  should  be  laid  as  straight  as  possible,  turns  if 
any,  being  made  with  easy  curves.  The  pipe  should  rise  on  a  uni- 
form grade  from  the  supply  to  the  pump.  Pockets  and  high  places 
should  be  carefully  avoided  to  insure  steady  running  of  the  pump. 
Air  may  be  retained  in  the  pipe  at  high  points  and  cause  much 
trouble  in  starting  and  operating  the  pump.  Any  air  entrapped  in 
a  suction  pipe  will  expand  and  contract  at  each  pulsation  of  the 
pump  and  it  will  cut  down  the  cross  sectional  area  of  the  pipe  at 
that  point.  The  pump  can  never  run  well  under  such  conditions. 
For  the  same  reason  great  care  must  be  used  to  get  the  joints  of  the 
suction  pipe  perfectly  tight.  Moreover,  if  there  is  a  leakage  of  air 
the  pump  cannot  exhaust  the  pipe  and  so  might  be  unable  to  take 
its  water. 


232 


LECTURES  ON  FIRE  INSURANCE 


Priming 
Tanks, 


Fire  pumps  should  have  at  least  two  sources  of  water  for  prim- 
ing purposes.  An  independent  tank  reserved  solely  for  this  pur- 
pose is  essential  for  safety  where  there  is  a  lift  necessary.  The 
National  rules  give  the  sizes  of  tank  necessary  for  the  several  sizes 
of  pump.  Priming  water  is  used,  to  fill  the  pump  and  cover  the 
pump  valves,  sealing  them  so  that  they  will  he  air  tight.  This 
prevents  air  working  back  into  the  suction  after  once  exhausted  and 
maintains  the  vacuum. 


A  National  Standard  Steam  Fire  Pump. 


STEAM  PUMPS 

The  National  The  principal  features  of  the  standard  steam  fire  pump  as  dif- 

Standard         fering  from  ordinary  steam  pumps  are  as  follows  : — 
Steam  Pump.  The  use  of  brass  plungers  instead  of  cast-iron  ones. 

Bronze  piston  rods  and  valve  rods  instead  of  iron  or  steel. 

Brass  lined  stuffing  boxes. 

Area  of  water  valves  25  to  50  per  cent  greater. 

Suction  pipe  connections  two  to  four  inches  greater  in  diam- 
eter. 

Larger  air  cliamber. 

Other  special  features  of  design  tending  toward  strength,  speed, 
rust-proofing  and   lilu'ral   passage  .for  the  water.      There  are  also 


PUMPS  233 

several  important  fittings  added  which  are  especially  needed  on  fire   The 
pumps.  National 

National  Standard  pumps  must  be  of  the  duplex  type,  whicli 
has  practically  two  distinct  pumps  working  side  by  side.  This  in-  p^^^p^ 
sures  a  constant  flow  from  the  pump  and  avoids  the  danger  of  the 
pump  stopping  on  a  "  dead  center."  The  duplex  pump  also  gives 
more  capacity  at  less  speed,  is  more  efficient  and  safe  against  break- 
age than  pumps  of  the  single  cylinder  type. 

National  Standard  pumps  are  made  in  the  following  sizes  : 
14x7x12  for  the  500  gallon;  16x9x12  for  the  750  gallon;  18x10x12 
for  the  1,000  gallon,  and  20x12x16  for  the  1500  gallon  pump.  An 
18x10x12  pump  means  one  with  steam  cylinders  18  inches  in  diam- 
eter, water  plungers  10  inches  in  diameter,  and  the  length  of  the 
stroke  is  12  inches.  It  delivers  at  a  speed  of  70  revolutions  1,000 
gallons  per  minute,  and  when  new  is  reqviired  to  have  a  capacity  of 
20  per  cent  o^■er  its  rated. capacity. 

The  National  rules  should  be  studied  carefully  in  connection 
with  this  subject.  We  will  here  but  briefly  mention  the  principal 
points  which  the  rules  co%  er. 

The  steam  ports  and  water  passages  are  liberal  in  size  to 
enable  high  speeds  to  be  attained  and  to  insure  an  ample  discharge 
capacit^• 

Tlie  pumps  are  rust-proofed  hy  making  the  sliding  parts  of 
bronze  or  brass.  The  minor  parts  are  made  strong  by  the  substi- 
tution of  steel  forgings,  steel  castings,  or  wrought-iron  forgings  for 
cast-iron. 

Extra  attachments  are  found  necessary  for  good  fire  service 
on  account  of  the  peculiar  demands  which  a  fire  pump  must  meet. 
Some  of  these  are  air  chamber,  vacuum  chamber,  gauges,  relief  or 
safety  valve,  stroke  gauge,  name  and  capacity  plate,  oil  pump,  and 
automatic  lubricator. 

Large  pipe  outlets  and  a  large  number  of  water  valves  are 
provided  to  give  a  smooth,  free,  and  uniform  delivery. 

Solid  or  ring  packed  pistons  with  plain  non-adjustable  slide   The  Steam 
valves  are  operated  mechanically  by  rocker  arm  levers  directly  from   End. 
the  pistons.      The   valve  is  fixed  in  position  wath  non-variable  lap 
and  lead.     This  valve  was  formerly   made  adjustable,  but  it  was 
often  adjusted  improperly  by  the  mechanics  in  charge  of  the  pump. 

A  steam  cushion  is  formed  to  prevent  the  piston  striking  the 
end  of  the  cylinder.  Ctishion  valves  to  regulate  this  and  thereby 
govern  the  length  of  the  stroke  are  also   provided.      These  valves 


234  LECTURES  ON  HRE  INSURANCE 


are  operated  liy  hand  as  desired.  The  steam  cushion  prevents 
pounding-  and  lireakage  in  case  of  sudden  release  of  load  by  a  break 
of  the  discharge  or  suction  pipes  or  the  sudden  admission  of  air 
into  the  suctitjn. 

Drain  cocks  are  pro\ided  at  each  end  of  the  cylinder  to  free 
tbe  cylinders  of  condensed  steam. 

The  exhaust  pipe  is  liberal  in  size  and  should  be  installed 
without  bends  directly  to  outside  so  as  to  avoid  anv  possibilitv  of 
back  pressure. 

The  yoke  is  the  hea\y  casting  connecting  the  steam  cylinders 
to  the  water  end.  It  is  fitted  to  these  with  a  machined  joint,  with- 
out packing-,  to  maintain  perfect  alignment. 

Rocker  shafts  are  of  forged  iron  or  steel  with  bronze  bush- 
ings in  wide  bearings.  No  cast-iron  should  be  used  for  these 
parts.  Cranks,  valve-nxl  heads  and  piston-rod  spools  may  be  of 
cast-iron,  but  preferably  of  steel  or  forgings.  Levers  and  ^■alve- 
rod  links  must  be  of  steel  or  forgings. 

V^alve  rods  and  piston  rods  are  of  solid   Tobin  bronze.      All 
stuffing  boxes  have  brass  rings. 
The  Water  The   zvater  chambers  are   built   very   strongly  and    of   liberal 

^^^'  capacity.      The   hand   holes  are  large,  making  the  interior  of  the 

chambers  easily  accessible.  The  pliingers  and  their  bushings 
are  of  solid  brass  or  bronze  of  slightly  different  alloys  to  prevent 
scoring.  Perfect  alignment  is  necessary,  the  skill  of  the  builder 
being  put  to  its  hardest  test  in  this  work.  The  plunger  rings  are 
removable  so  that  a  cylinder  can  be  inserted  if  desired  and  the 
pump  changed  from  a  plunger  to  a  piston  type.  Pistons  are  pre- 
ferred where  gritty  waters  must  be  handled  and  for  automatic 
pumps. 

The  pump  valves  are  all  of  one  size  and  interchangeable. 
They  are  so  spaced  as  to  be  well  separated  from  each  other, 
which  helps  toward  a  smooth  flow.  The  rubber  valve  discs  are 
reversible,  three  to  four  inches  in  diameter  bv  about  five-eighths 
inch  thick.  They  lift  about  one-half  inch  off  their  seats.  Many 
small  valves  are  used  in  preference  to  a  few  large  valves,  thereby 
tending  to  more  quiet  running  when  large  volumes  of  water  are 
being  pumped.  The  total  area  of  the  suction  valves  is  about  one 
third  more  than  that  of  the  discharge  valves.  This  insures  full 
suction  chambers  at  each  stroke.  The  valve  springs  and  covers 
are  of  solid  brass.  The  springs  maintain  a  load  of  about  one 
pound   per  square    inch   on   the  suction  valves,  and    two   or  three 


PUMPS 


235 


pounds  on  the  discharge  valves.      Extra  stiff   springs  are  used  on   The  Water 
suction  valves  when  water   is   taken  under  a  head.      These  rubber   End. 
valves  tend   to  stick   to   their  seats,  so   the  rule   is  made   that   fire 
pumps  be  run  a  little  every  week  to  keep  them  in  good  condition. 
Valve  stems  and  seat   rings  are  of  bronze,  the   latter  being  firmly 
expanded  into  the  casting  to  prevent  their  working  loose. 

The  pipe  Jiang'es  \)YOY\de  for  large  sized  pipe  connections,  as 
follows — : 

Size  of  Pump     -Suction  Pipe    Discharge  Pipe 
500  gals.  8  6 

750  gals.  10  8 

1,000  gals.  12  8 


Steam 

Exhaust 

3 

4 

3^ 

4 

4 

5 

A  National  Standard  1000  gal.   Rotary  Fire  Pump. 


236 


LECTURES  ON  FIRE  INSURANCE 


Vacuum    and    air   pressure    chambers    are    provided    on    the 
suction    and   the  discharge  pipes   to  care    for   the   pulsations    and 
steady  the  flow. 
Miscellaneous  Gauges  are  provided   for   indicating  the  steam  and   the  water 

Fittings.  pressure. 

There  are  hose  connections  screwed  directly  into  the  pump 
casting  so  that  hose  may  be  used  in  case  the  main  discharge  pipe 
is  broken.  A  valve  is  provided  in  the  discharge  pipe  near  the 
pump  for  this  purpose. 

A  safety  or  relief  valve  is  provided  which  will  waste  water 
and  relieve  the  pressure  if  it  exceeds  that  at  which  the  valve  is 
set.  This  prevents  injury  to  the  pump  in  case  the  pressure  is 
suddenly  thrown  back,  as  it  would  be  if  a  hydrant  were  suddenly 
shut  down. 

An  air  vent  or  starting  valve  is  provided  to  relieve  the  air 
taken  from  the  suction  pipe  in  starting  up  the  pump. 

Priming  valves  and  checks  are  provided  to  control  the  prim- 
ing water  so  that  each  chamber  may  be  promptly  filled.  The 
checks  prevent  water  from  passing  from  one  chamber  to  the  other 
through  the  priming  pipes. 


National 
Standard 
Rotary 
Pumps. 


ROTARY  PUMPS 

The  vStandard  rotary  pump  differs  from  ordinary  rotarv  fire 
pumps  in  that  it  is  designed  with  more  liberal  pipe  connections, 
larger  water  passages,  is  rust-proofed  and  provided  with  the 
same  special  accessories  necessary  for  fire  pumps  as  are  called 
for  in  the  steam  pump  specifications. 

There  are  two  tvpes,  A  and  B. 

The  "A"  type  is  built  on  the  old  designs,  the  specifications 
calling  for  but  slight  changes  in  the  patterns.  It  has,  however, 
the  larger  inlets  and  outlets,  the  air  chamber,  hose  valves,  relief 
valves,  starting  valve,  priming  pipe,  name  plate,  gauges  and  oil 
and  grease  cups.  The  body  and  cams  are  of  solid  bronze.  A 
vacuum  chamber  is  not  necessary  on  rotary  pumps. 

The  type  "B"  has  heavy  shafts,  a  single  pair  of  forged  steel 
gears  running  in  oil,  long  self-oiling  bearings  and  special  stuffing 
boxes  designed  to  make  a  tight  water  joint  at  the  pump  case  wall 
without  the  use  of  packing. 

The  form  of  the  cams  and  general  lines  of  the  pump  are  left 
to  the  judgment  and  desires  of  the  individual  manufacturer. 


PUMPS 


237 


In  laying  out  the  power  for  a  rotary  pump  judgment  must  be  Rotary  Pump 
used  as  to  how   the  pump  is  to  be  driven.      The   local   conditions  Drives, 
vary   so   greatly   that    each    case  must   be  worked    out   separately. 
Other  things  being  equal,  the  methods  of  driving  are  recommended 
in  the  following  order: — 


A  National  Standard  Type  B  Rotary  Fire  Pump. 


Direct  or  spur  gearing  from  independent  source  of  power. 

Spur  gearing  from  the  main  shaft,  with  jaw  or  friction  clutch 
to  throw  out  all  other  shafting. 

Grooved  friction  wheels. 

With  the  latter  a  pump  requires  about  30  h.  p.  for  each  fire 
stream  (120  h.  p.  for  1,000  gallon  pump).  Less  power  is  con- 
sumed bv  a  direct  clutch  drive.      Friction  wheels  should  never  be 


238 


LECTURES  ON  FIRE  INSURANCE 


Rotary  Pump  used  where  there  is  not  ample  power  available.      Lack   of  proper 
Drives.  power    is   the   most    common    defect    in    rotary   pump    protection 

to-day.  F'riction  wheels  should  always  be  guarded  to  prevent 
foreign  matter,  grease,  etc.,  getting  on  them.  Rotarv  pumps  are 
run  at  200  to  300  revolutions  per  minute.  .Special  care  is  neces- 
sary as  to  foundations,  for  pumps  must  often  be  located  where 
a    firm    foundation    is   not   readily  obtainable. 

A  rotary  pump  should  not  have  a  lift  of  over  six  feet. 
The  supply  should  be  taken  from  the  raceway  or  forebay  properly 
screened.      A  foot  valve  is  necessary  if  the  lift  is  lo  feet  or  over. 


Location  for 

Rotary 

Pumps. 


Friction  Wheels   for   Dri\ing  Rotary   Fire   Pumps. 

or  where  the  suction  is  over  250  feet  long.  Foot  valves  should  be 
avoided  if  possible.  Suction  ]:)ipes  should  be  one  size  larger  if 
over  50  feet  long.  Rotary  pumps  run  a  little  steadier  under  a 
slight  lift  than  under  a  head,  but  suction  under  a  head  is  some- 
what desirable,  as  it  obviates  the  necessity  of  ]:)riming  the  pump 
before  starting  it  up. 

The  best  location  for  a  rotarv  puni]:)  is  in  a  detached  wheel 
house.  If  such  a  location  cannot  be  provided  a  fireproof  room  well 
cut  off  should  be  built  enclosing   the  wheels    and    pumj:).      If   the 


PUMPS  239 

wheels  are  under  a  Iniilding,  a  fireproof  vault  should  be  built  and   Location  for 
a  passage  of  similar   construction   built  from  a  safe  place   outside   Rotary 
into   the   pump   vault.      This    would   permit   one   to    operate   and   Pun^ps- 
tend   the    pump    even    though   a   bad   fire   was   underway    in   the 
building  above.      The  vault  would  protect  the  pump  from  falling 
debris   and  so  permit    its   operation   throughout  a  bad    fire.      It  is 
little   use   to   have   the   wheel    and   pump    start   from    outside   the 
building.      It    is    much    better  to    make    the     pump    and    wheels 
safely  accessible  where  the  pump  may  be  properly  primed,  oiled, 
the    mill   shafting  thrown    out  and,   if  necessary,    hose    attached. 
After  a  rotary  pump  is  once  underway  and  well  supplied  with  oil 
it  can  be  safely   left  running  without  attendance.      This   is  one  of 
the  great  advantages  of  this  type  of  pump. 

Freezi)ig.  Special  care  is  needed  to  protect  against  frost. 
It  is  best  to  enclose  the  pump  and  keep  it  heated.  The  suction 
pipe  should  be  drained  or,  if  under  a  head,  water  kept  running 
through  it  continually  during  cold  weather. 

CENTRIFUGAL  PUMPS 

The  principle  of   a  centrifugal   pump  is  similar   to   that   of  a   Centrifugal 
water  wheel  of  the  turbine  type,  where  water  pressure,  which    is   Fire  Pumps, 
a  product  of  mass  or  volume  of  water  and  velocity  or  rate  of  flow, 
acts  on    inclined    planes   so   arranged    as    to  give   to   the   wheel    a 
rotary  motion. 

The  centrifugal  pump  is  just  the  reverse.  A  mass  of  water 
is  given  a  high  velocity  and  the  velocity  is  transformed  into 
pressure. 

A  large  mass  or  quantity  of  water  is  presented  at  the  center 
of  a  rapidly  revolving  impeller  which  throws  the  water  outward 
radially  at  a  great  velocity.  The  water  is  guided  in  its  course 
by  channels  or  passages  forming  a  part  of  the  impeller.  The 
form  of  these  impellers  is  called  the  characteristic  of  the  pump. 
The  characteristic  varies  according  to  the  speed,  volume,  pres- 
sure and  ideas  of  the  designer.  By  a  sudden  enlargement  of  the 
passages  beyond  the  rim  of  the  impeller  the  velocity  is  changed 
to  pressure.  A  centrifugal  dryer  illustrates  the  action  of  the  im- 
peller in  throwing  the  water  outward.  A  top  spun  after  wetting 
it  will  throw  off  the  water  in  a  similar  way.  If  we  reverse  the 
action  of  a  flowing  stream  passing  through  a  nozzle  we  will  illus- 
trate the  principle  of  the  second  part  of  the  pump — the  chambers 
where  velocity  is  changed  to  pressure. 


240 


LECTURES  ON  FIRE  INSURANCE 


Centrifugal  The  speed  of  impellers  is   from    700  to  1,500  revolutions  per 

Fire  Pumps,    minute. 

The  great  advantage  of  the  centrifugal  pump  is  its  sim- 
plicity. There  is  only  one  moving  part.  The  disadvantage, 
aside  from  the  power  problem,  is  the  difficulty  in  operating 
this  type  of  pump  where  it  must  take  its  suction  under  a  lift. 

Centrifugal  pumps  are  velocity  pumps  strictly;  all  others  are 
displacement  pumps. 

The  centrifugal  pump,  having  no  power  to  create  a  vacuum, 
must  be  well  primed  before  it  can  lie  started.  The  entire  pump 
and  suction  pipe  must  be  filled.  Even  after  well  under  wav,  if 
a  little  air  gets  into  the  suction  it  will  destroy  the  continuity  of  the 
current  and  may  stop  the  pump. 


A  National  Standard  Centrifugal  Fire  Pump  with  Electric  Motor. 


Centrifugal  pumps  are  only  thoroughly  reliable  when  taking 
water  under  a  head  or  where  there  are  exceptional  facilities  for 
priming  them.  Their  efficiency  runs  from  •30'}^,  to  70%.  They 
can  deliver  large  quantities  of  water  with  a  high  efficiencv,  but 
are  not  well  adapted  to  give  high  presssures.  The  recent  de- 
velopment of  two,  three  and  four  stage  pumps  has  enabled  higher 
pressures  to  be  obtained  and  has  led  to  the  development  of  the 
National  Standard  centrifugal  fire  pump. 


PUMPS 


241 


A  single  stage  pump  has  a  single  impeller  and  may  raise  Centrifugal 
water  from  atmospheric  pressure  up  to  40  or  50  pounds  pressure.  Fire  Pumps. 
Single  stage  pumps,  as  usually  designed,  cannot  serve  as  fire 
pumps.  The  rules  permit  either  a  two,  three  or  four  stage  pump. 
This  means  a  pump  with  two,  three  or  four  impellers.  E'ach 
impeller  takes  water  from  the  one  preceding  it,  so  that  the  high 
pressure  is  created  by  stages,  the  first  impeller  giving  say  40 
pounds,  the  second  receiving  the  water  at  40  pounds  and  deliver- 
ing it  at  80,  and  so  on. 

The  same  general  specifications  are  laid  down  as  in  other 
standard  pumps  relative  to  workmanship,  rust-proofing,  capacity, 
strength,  details  of  construction,  hose  valves,  starting  valves, 
gauges  and  priming  supply.  A  relief  valve  is  only  required 
under  variable  speed  motor  and  when  designed  for  high  pressure. 


Section  of  a  Centrifugal  Fire  Pump. 


Centrifugal  pumps  may  be  driven  directly  from  motors  or  by 
gearing  from  the  main  shaft  from  the  wheels  or  other  source  of 
power. 

As  there  is  but  one  moving  part,  and  this  has  only  a  rotating 
motion,  no  valves  or  reciprocating  parts,  this  type  of  pump  runs 
with  remarkable  steadiness  and  quietness.  It  is  in  a  measure 
self-regulating,  as  the  amount  of   discharge  governs   the  work  the 


242 


LECTURES  ON  FIRE  INSURANCE 


Centrifugal  pump  is  doing.  It  delivers  much  over  its  rated  capacity  at  pres- 
Firc  Pumps,  sures  slightly  below  that  for  which  it  is  designed.  This  is  a 
valuable  quality  for  supplying  sprinklers.  Little  trouble  is  ex- 
perienced in  operating  this  pump,  aside  from  the  motor  or  other 
source  of  power.  The  difficulty  in  arranging  a  reliable  drive  for 
these  pumps  forms  the  principal  objection  to  them.  Electric 
power  is  always  liable  to  failure  from  different  causes,  and  the 
cost  of  motors  adds  materially  to  the  expense  of  a  centrifugal 
pump  installation. 

In  some  cases    it    may   be  possible   to   drive   these  pumps   by 
other  than  electric  power. 


Standard  Type  A  Rotary  Pump,  directly  connected  to  Motor. 


ELECTRIC  PUMPS 

Electric  The  L^nderwriters'  standard  relates  to  the  electric  power  onl}-. 

Pumps.  Any  of  the  approved   types  of  rotary  or   centrifugal    pumps   may 

be  used.  Triplex  power  pumps  may  be  used  under  special 
arrangement.  The  principal  points  covered  in  the  specifications 
are  as  follows: — 


PUMPS  243 

The  current  supply  must  be  from  fireproof,  or  two  inde- 
pendent stations,  reliable  at  all  times  and  of  ample  capacity  to 
provide  for  sudden  additional  demands. 

The  transmission  lines  must  be  two  complete  independent 
circuits  with  separate  transformers,  if  any  are  required.  The 
feeders  must  be  liberal  in  size;  protectors  and  other  special 
rulings  as  to  details  are  also  specified  as  described  in  the  rules. 

The  Pump  Room  must  be  fireproof,  cut  off  from  the  risk, 
accessible  from  outside,  drained  and  ventilated. 

Transformers  should  be  located  in  a  separate  vault. 

The  motor  is  connected  to  the  pump  by  direct  or  sjDur  gearing. 

Motors  should  be  protected  from  water  damage  by  putting 
them  in  separate  compartments  from  the  pump.  Any  leaks  in 
the  pump  or  its  pipe  connections  might  otherwise  wet  the  motor 
and  cause  a  burn  out. 

Electric  pumps  may  have  an  automatic  controller,  so  that 
the  pump  can  be  used  as  an  automatic  supply  to  sprinklers  or 
hydrants.  In  this  case  an  air  pressure  tank  is  required  to  govern 
the  controller,  so  that  the  pump  will  not  be  continually  starting 
and  stopping  with  each  variation  of  pressure  in  the  system. 

Circuit  breakers  are  required  on  the  power  line  instead  of 
fuses,  so  that  the  line  may  be  restored  at  once. 

Two  relief  valves  are  required  on  electric  pumps  as  an  extra 
precaution  in  saving  the  motor  from  overloading. 

AUTOMATIC  PUMPS 

These  are  ordinary  fire  pumps  arranged  to  maintain  pressure   Automatic 
automatically    on    sprinkler   or   hydrant   systems.      They   may   be   Pumps, 
electrically  driven  as  previously  described  or  as  is  more  common, 
steam  pumps  with  automatic  governors  to  admit  and  cut  off  steam 
to  the  pump  as  called  for. 

They  are  not  acceptable  as  a  primary  supply  except  as  a  last 
resort  when  no  other  source  is  readily  obtainable.  Theoretically 
they  are  very  attractive,  as  they  are  expected  to  keep  up  the 
pressure  continually  whether  there  is  little  or  much  draft  of  water 
from  the  system,  but  in  practice  they  are  found  frequently  out  of 
order.  They  require  skilled  mechanics  and  much  attention  to 
keep  them  in  service. 

The  automatic  regulator  is  a  device  under  the  control  of  the 
water  pressure  in  the  system.      If  set  at   say  100  pounds  the  regu- 


244 


LECTURES  ON  FIRE  INSURANCE 


lator  will  keep  the  steam  shut  off,  and  therefore  stop  the  pump,  as 
long  as  the  pressure  remains  at  100  pounds.  If  the  pressure  falls 
below  this  the  regulator  will  open  the  steam  valve,  allowing  the 
pump  to  run  until  the  pressure  is  restored  to  100  pounds,  when  it 
will  again  shut  off  the  steam. 
Auxiliary  Where  an  automatic  pump  must  be  used  the   National   rules 

Pumps.  call  for  an  auxiliary  pump  to  operate  in  connection  with  the  main 

pump.  The  auxiliary  pump  is  a  small  one  which  by  means  of 
an  automatic  pump  governor  keeps  up  the  pressure  on  the  system 
ordinarily  when  the  loss  is  due  only  to  leakage.  If  fire  streams 
are  taken  off,  the  capacity  of  the  auxiliary  pump  is  exceeded  and 


Steam  Fire  Pump,  Showing  Automatic  Regulator, 
Steam  Trap  and  Priming  Tank. 

the  pressure  drops,  operating  the  main  pump  governor  so  that 
the  large  pump  is  started  up.  By  such  an  arrangement  the  large 
pump  is  saved  from  continual  running  and  is  preserved  in  good 
condition  for  emergency  use.  There  are  also  two  pump  gov- 
ernors, so  if  that  of  the  auxiliary  pump  fails  the  other  one  will  be 
brought  into  use  automatically. 

The  requirements  specify  in  detail   the  manner  in  which   the 
auxiliary    pump    is   connected    up   under   different    conditions    of 


PUMPS  245 

suction  supply.  The  idea  is  to  so  arrange  the  installation  that 
the  large  tire  pump  will  always  be  primed  so  that  it  can  catch 
water  at  once  when  starting  up.  These  details  should  be  studied 
in  connection  with  the  outside  reading  for  this  course. 


PUMP  TESTING 

A  pump  should   be   tested   yearly   to  note    its   smoothness   of  Pump 
action    and    its   maximum   delivery.      This    is   done   by    pumping   Testing, 
through  hose  streams  with  smooth  nozzles,  so  that   the  amount  of 
water  can  be  accurately  measured.      A  steam  pump  should  deliver 
its  full  rated    capacity  at  70  revolutions    per   minute,  and  a  rotary 
pump  at  the  rated  speed  designated  by  the  builders. 

By  adjusting  a  steam  pump  to  make  its  full  12-inch  stroke  and 
counting  the  speed,  the  theoretical  displacement  can  be  compared 
with  its  actual  delivery  through  the  nozzles.  New  pumps  ought 
to  deliver  'iO^^  over  their  rated  capacity  with  smooth  action. 

If  it  is  desired  to  determine  the  maximum  capacity  of  the 
pump  an  extra  stream  can  be  put  on  and  the  pump  speeded  up 
until  it  begins  to  pound.  Often  a  speed  of  85  to  90  revolutions 
can  be  attained.  A  good  foundation  is  an  important  factor  in 
helping  a  pump  to  run  at  high  speed. 

A  pump  with  worn  plungers  or  leaky  or  missing  valves  will 
have  an  excessive  ''slip."  This  means  that  water  will  pass  back 
from  one  chamber  to  another,  and  the  delivery  of  the  pump  will 
be  lessened  by  the  amount  of  such  slippage.  By  closing  the  dis- 
charge valve  and  running  the  pump  slowly  at  100  pounds  pressure 
the  amount  of  this  slippage  may  be  estimated.  A  pump  in  good 
condition  will  not  make  over  two  or  three  revolutions  per  minute 
under  these  conditions. 

If  the  discharge  of  a  pump  is  carefully  measured  under  fav- 
orable conditions  its  slippage  may  be  determined  approximately  by 
comparing  its  delivery  with  the  theoretical  displacement  of  the 
plunger  or  cams.  Pumps  should  slip  a  little  to  prevent  tightness 
and  avoid  danger  of  scoring  the  plunger.  A  pump  slipping  10% 
might  be  called  in  good  condition.  One  slipping  20^  would 
need  repairs. 

If  the  plunger  or  pistons  are  too  tight  there  will  lie  excessive 
friction  and  a  waste  of  power.  To  determine  if  this  is  so  the 
steam   pressure    is    read    and    compared    with    the   water   pressure 


246  LECTURES  ON  FIRE  INSURANCE 


Pump  when   at    full    speed.      With    a   water   pressure  of   100   pounds,   a 

Testing.  steam  pressure  of  not  over  40  to  50  pounds  should  be  necessary. 

To  determine  the  tightness  of  the  joints  and  castings  and  to 
develop  any  weak  places,  a  pressure  of  240  pounds  is  pumped  up 
with  the  discharge  outlets  practically  closed. 

The  safety  or  relief  valve  should  also  be  tested.  It  should  be 
capable  of  delivering  the  full  capacity  of  the  pump  at  its  rated 
speed  without  letting  the  pressure  rise  more  than  125  pounds 
where  the  valve  is  set  to  oj^en  at  100  pounds. 

Rotary  pumps  are  tested  for  about  the  same  points  as  are 
steam  pumps. 

QUESTIONS 

1.  Under  what  conditions  are  fire  pumps  most  used.? 

2.  Name  the  three  types  of  National  Standard  fire  pumps, 
giving  the  principles  of  the  mechanism  of  each  briefly. 

3.  Describe  the  important  features  necessary  to  consider  in 
arranging  the  power  for  (a)  a  steam  fire  pump;  (/>)  a  rotary 
fire  pumjD. 

4.  Name  the  important  features  necessary  for  a  safe  water 
supply  for  a  fire  pump.      Explain  "lift"  and  "head." 

5.  Explain  the  manner  in  which  a  pump  obtains  its  water, 
some  defects  which  might  cripple  the  suction,  and  why  a  priming 
tank  is  necessary. 

6.  Tell  wherein  the  National  Standard  steam  fire  pump  differs 
materially  from  ordinary  pumps  in 

(a)  The  steam  end. 
(d)  The  water  end. 
(c)  The  connecting  parts, 

7.  What  is  a  relief  valve  and  why  is  it  used? 

8.  Describe  the  principal  features  of  a  National  Standard 
rotary  fire  pump  which  differ  from  an  ordinary  rotary  pump. 

9.  Name  the  methods  of  driving  rotary  pumps  in  the  order 
of  your  preference. 

10.  Name  the  advantages  and  disadvantages  of  centrifugal 
fire  pumps. 

11.  What  are  the  principal  features  of  the  requirements  for 
electrically  driven  fire  pumps?  What  types  of  pumps  are  so 
driven  ? 

12.  What  is  an  automatic  pump?  What  are  its  advantages 
and  disadvantages? 


PUMPS  247 

13.  State  the  conditions  and  arrangement  under  which  an 
automatic  pump  would  be  acceptable. 

14.  State  the  sizes  of  pump,  sizes  of  suction  and  discharge 
for  each,  and  the  speeds  used  for  all  pumps  covered  by  the 
National  specifications. 

15.  Describe  the  principal  tests  for  fire  pumps  and  the 
methods  for  conducting  them. 

BIBLIOGRAPHY 

National  Board  of  Fire  Underwriters — Rules  and  require- 
ments. 

Steam  fire  pumps,  Pam.,  57  pp. 

Electric  fire  pumps,  Pam.,  8  pp. 

Centrifugal  fire  pumps,  Pam.,  24  pp. 

Rotary  fire  pumps,  Pam.  43  pp. 

Steam  pump  go^  ernors  and  auxiliary  pumps,  Pam,  12  pp. 

National  Fire  Protection  Association  :  Gas  engines  for  fire 
pumps  supplying  high  pressure  fire  service  at  Philadelphia,  Pa. 
Proceedings  N.  F.  P.  A.,  1904  :   209. 

Owen,  Ira  J.  :  Fire  pumps.  In,  Notes  on  Hydraulics,  pp. 
358-381. 


WATER  WORKS 

Introduction.  As  we  are  all  familiar  with  the  features  of  an  ordinary  citv  or 

town  water  supply  system,  it  will  not  be  necessary  to  f^o  further  in 
this  talk  than  to  mention  a  few  of  the  principal  points  which  are  of 
particular  interest  to  the  student  of  tire  protection. 

Water  supplies  are  maintained  for  four  purposes, — 

1.  To  supply  water  for  food  and  drink. 

2.  For  sanitary  uses  :  washing  and  cleanino-. 

3.  For  industrial  and  productive  uses  such  as  manufactur- 

ing, gardening,  etc. 

4.  For  protection  against  fire. 

The  first  and  second  of  these  require  a  pure  water,  not  con- 
taminated with  disease,  color  or  odor.  The  last  item,  tire  protec- 
tion, relates  to  quantities  and  pressures,  the  purity  of  the  water  not 
being  essential.  The  industrial  demands  may  or  may  not  call  for 
all  the  other  qualities  of  the  supply.  The  fire  protection  calls  for 
relatively  such  large  quantities  and  high  pressures  that,  if  its  require- 
ments are  met  with,  the  industrial  demands  will  be  more  than 
amply  met. 

The  public  health  must  always  be  first  in  importance,  and  in 
order  to  carry  out  its  requirements,  under  some  conditions  it  may 
be  obtained  at  the  expense  of  quantity  and  pressure,  which  are  the 
essentials  of  a  good  supply  for  fire  protection. 

Water  is  obtained  from  natural  lakes,  ponds,  springs,  ri\  ers, 
sunken  and  driven  wells.  For  health  the  softer  waters  of  lakes, 
ri\ers  and  ponds  are  preferred,  providing  they  are  pure  or  are 
properly  filtered.  These  surface  waters  are  possibly  somewhat  less 
desirable  from  strictlv  a  pipe  maintenance  point  of  view,  as  they  arc 
more  apt  to  form  tubercles  or  other  obstructions  in  the  pipes  than 
are  ground  waters. 

Usually  a  single  waterworks  system  fulfills  all  of  the  four  above 
mentioned  purposes.  Often,  however,  the  system  will  be  divided, 
the  domestic  service  being  supplied  by  one  S}'stem  and  the  fire  pro- 
tection  being  furnished  by  a  secondary  svsteni,  or  as  an  atljunct  to 


WATER  WORKS  249 


the  first  system.  In  other  cases  a  system  supplying  domestic 
demands  on  higher  leyels  will  be  extended  to  a  district  on  a  lower 
leyel,  already  haying  its  own  domestic  supply.  The  latter  district 
will  then  ha^  e  two  supplies,  a  high  and  a  low  seryice,  and  in  this 
case  the  high  seryice  is  usually  reseryed  for  fire  protection  purposes 
in  the  low  level  district.  The  cities  of  Hayerhill  and  Worcester 
are  examples  of  cities  with  such  high  and  low  pressure  systems. 

I  think  we  can  join  with  our  friends  the  Socialists  to  the  extent   Public  vs. 
of  agreeing  that,  from  a  fire  protection  point  of  view,  public  owner-   Private 
ship  of  \yater  supplies  and  systems  should  be  encouraged  and  priyate   Ownership 
ownership  should  be  deplored. 

In  a  large  majority  of  cases  where  private  water  companies 
control  the  supplies  we  w^ill  find  low  pressures,  small  pipe  lines, 
scant  supplies  and  general  lack  of  the  essentials  of  a  good  supply 
for  fire  protection.  The  point  of  view  of  the  water  company  is  in- 
come, and  as  the  demands  of  domestic  service  call  for  but  a  small 
amount  of  water  as  compared  with  fire  service,  this  income  can  be 
procured  with  a  small  source  of  supply,  small  pumping  capacity 
and  small  sized  water  mains,  all  of  which  mean  a  relatiyelv  small 
expenditure  of  capital  with  a  maximum  of  income.  At  the  same 
time,  if  hydrants  are  leased  at  so  much  a  year,  they  earn  the  same 
income  whether  attached  to  four-inch  pipes  or  to  ten-inch  pipes. 
The  amount  of  water  obtainable  at  the  hydrant  seems  to  be  a  factor 
not  worth  considering,  from  this  income  point  of  view. 

Under  public  ownership  the  feature  of  public  service  is  likely 
to  receive  proper  attention  and  the  system  is  more  apt  to  be  laid  out 
on  lines  to  furnish  both  a  good  domestic  and  a  good  fire  supply. 
As  250  gallons  a  minute  roughly  approximates  the  domestic  con- 
sumption of  5  to  6,000  people,  and  this  same  250  gallons  a  minute 
represents  07ily  one  good  Jire  stream^  the  great  difference  between 
furnishing  water  for  domestic  purposes  and  for  fire  protection  is 
evident. 

Cities  and  towns  should  go  very  carefully  in  considering  the 
proposition  of  granting  franchises  for  water  companies.  It  is  said 
that  in  Paterson,  N.  J.,  the  water  company  furnished  water  under 
a  pressure  of  not  over  twenty  pounds,  and  when  the  citizens  sought 
to  rebuke  the  company  it  brought  out  its  ancient  contract  in  which 
it  was  shown  that  the  company  was  very  liberal,  as  the  franchise 
was  obtained  under  the  stipulation  requiring  only  ten  pounds  pres- 
sure. This  same  company  has  been  credited  with  charging  $500 
yearly  for  a  single  connection  to  a  dry-pipe  sprinkler  system. 


250  LECTURES  ON  FIRE  INSURANCE 

D  J  Water  for  use  of  the  public  fire  department  in  fighting  fires  is 

Governing  i^ot  ^^  'i  rule  directly  charged  for,  either  by  private  companies  or  by 
Fire  Service  departments  owned  publicly.  All  water  companies  and  many 
Supplies.  public  departments  charge  for  connections  and  water  used  in  main- 
taining pri\ate  fire  protection  equipments.  Publicly  owned  water 
is  usually  connected  into  private  equipments  without  other  charge 
than  for  the  cost  of  the  necessary  connections  and  fittings,  but  many 
cities,  to  check  up  losses  of  water  in  such  systems,  are  requiring 
meters,  special  check  ^•alves,  sealed  valves  and  other  special  rules 
governing  fire  supplies.*  Other  towns  make  an  annual  charge  for 
sprinkler  or  other  fire  connections.  The  Millbury  Water  Company 
charged  fifteen  cents  per  vear  per  sprinkler.  Boston  limits  the  size 
of  a  connection  to  four  inches,  although  there  mav  be  as  many  of 
these  as  needed.  Rules  \ary  greatly  among  different  communities. 
Private  fire  equipments  should  not  be  the  cause  of  additional 
expense  to  the  owners,  as  they  tend  to  minimize  the  consumption  of 
water  and  the  work  of  the  fire  department  at  any  given  fire. 

Types  of  Water  Systems 

There  are  three  classes  of  water  works  systems,  besides  special 
fire  service  systems,  which  latter  are  in  use  to  some  extent. 

1.  Gravity  systems. 

2.  Direct  pumping  systems. 

8.     Combined  gravity  and  direct  pumping  systems. 

These  take  their  names  from  the  manner  in  which  the  pressure 
is  governed  and  not  necessarily  from  the  mode  of  supply. 
Gravity  Gravity  systems  are  those  in  which  the  main  or  reserve  supply 

Systems.  ig  from  an  elevated  lake,  pond,  reservoir  or  tank,  the  level  of  water 

in  the  reservoir  or  tank  limiting  the  head  or  pressure  in  the  mains. 
The  flow,  therefore,  at  any  given  point  is  due  directly  to  the  height 
of  the  water  in  the  reservoir  above  that  point. 

A  gravity  system  may  have  pumps  which  run  continuously, 
pumping  into  the  mains,  yet  if  the  pressure  is  maintained  by  the 
head  from  a  reservoir  or  tank  it  is  called  a  gravity  system. 

In  its  simplest  form  a  gravity  system  is  one  supplied  from  an 
elevated  pond,  lake  or  other  natural  body  of  water.  The  supply 
depends  on  the  rainfall,  extent  of  water  shed  and  size  of  the  storage 
basin,  and  the  pressure  depends  upon  the  level  of  the  water  in  the 
basin. 

*See  Mr.  Dana's  talk  on  Detector  meters. 


WATER  WORKS  251 


A  more  common  form  of  the  gravity  system  consists  of  an  arti-  Gravity 
ficial  reservoir  or  tank  which  feeds  the  distributing  mains  by  gravitv,  Systems, 
the  reservoir  or  tank  being  filled  bv  pumps  located  at  some  water 
supply  on  a  lower  level.  The  pumps  may  discharge  directly  into 
the  town  pipes,  the  excess  over  the  consumption  flowing  back  to  fill 
the  reservoir,  or  they  may  discharge  into  the  reservoir  by  separate 
force  mains  running  from  the  pumps  to  the  reservoir  without  con- 
nection to  the  distributing  system. 

Reservoirs  may  be  formed  bv  excavating  or  by  being  built  up 
of  earth  dams,  brick,  stone  or  concrete.  Tanks  or  standpipes  are 
usually  of  steel  plates  riveted  together  as  a  boiler  is  built.  Some 
reinforced  concrete  standpipes  have  been  built.  Some  tanks, 
where  a  convenient  natural  elevation  is  not  obtainable,  are  erected 
on  high  trestles  to  give  the  necessary  head  or  pressure. 

The  supply  for  the  pumps  may  be  from  ri\ers,  brooks,  springs, 
lakes,  ponds,  wells,  or  driven  wells.  Driven  wells  consist  of  pipes 
driven  into  water-bearing  soil.  IVIanv  of  these  wells  are  connected 
together  to  supply  the  pimips  directly  or  to  supply  a  large  collecting- 
well  sunk  in  the  ground,  the  collecting  well  serving  as  a  suction 
supply  to  the  pumps. 

In  the  system  just  described  it  is  expected  that  the  pumps  will 
take  care  of  the  usual  consumption  during  the  day  and  be  able  to 
maintain  about  a  constant  level  in  the  reservoir.  At  night,  or  if  the 
pumps  were  otherwise  idle,  or  if  an  unusuallv  heavy  draft  of 
water  should  take  place,  some  of  the  water  would  be  supplied  bv 
the  reservoir.  With  pumps  and  reservoir  located  at  opposite  ends 
of  the  town,  a  very  desirable  arrangement  for  fire  protection  is 
obtained,  as  water  would  flow  from  both  directions  into  the  con- 
gested district. 

A  reservoir  is  more  desirable  for  storage  than  a  standpipe,  as  it 
gives  a  more  constant  pressure,  the  pressure  from  a  standpipe  varv- 
ing  much  more  if  it  is  not  kept  full,  owing  to  the  ratio  of  its  diameter 
to  its  height.  Standpipes  are  also  apt  to  be  of  small  capacitv.  A 
tank  20  feet  in  diameter  can  be  drawn  down  10  feet  in  15  minutes 
by  six  ordinary  hose  streams.  As  generallv  located,  standpipes 
must  be  kept  practically  full  during  a  fire  to  insure  good  working 
pressure.  The  pumping  capacity  should  therefore  be  designed  to 
amply  cover  any  probable  demand  on  the  system  for  fire  service. 

Direct    Pumping    Systems    are    sometimes    known    as    Hollv   Direct 
Systems,  the  pumps  for  such  systems  being  a  specialty  with  the   *'^"™P"'2 
Holly  Pump  Works.  '  Systems. 


252 


LECTURES  ON  FIRE  INSURANCE 


Direct 

Pumping 

Systems. 


Combined 
Gravity  and 
Direct 
Pumping 
System. 


In  these  systeins  the  pressure  in  the  mains  is  furnished  directly 
from  the  pumps.  There  are  no  standpipes  or  reservoirs  to  govern 
the  pressure.  Usually  the  pumps,  which  of  course  must  run  con- 
tinuously, are  operated  slowly,  maintaining  a  moderate  pressure  in 
the  mains,  the  pumps  being  speeded  up  to  increase  the  pressure  to 
about  100  pounds  in  case  of  fire.  Care  must  be  taken  with  such  a 
system  to  avoid  breakage  of  the  pumps  or  the  water  mains.  Safety 
or  relief  \ahes  are  provided  on  the  pumps  and  at  points  on  the  sys- 
tem to  release  water  should  the  pressure  rise  suddenlv  above  any 
predetermined  point  from  a  sudden  decrease  in  flow,  such  as  would 
take  place  in  shutting  off  hose  streams.  It  should  be  remembered 
that  water  is  incompressible.  Any  sudden  stoppage  of  its  flow 
in  the  pipes  causes  so-called  "  w^ater  hammer,"  which  delivers 
severe  blows  to  that  part  of  the  piping  where  it  occurs.  Water 
hammer  is  caused  by  sudden  changes  in  flow,  or  bv  plunger  eleva- 
tors, pumps  and  other  apparatus  interfering  with  the  normal 
movements  of  the  water.  Except  where  there  are  dead  ends  in 
the  piping,  the  danger  of  serious  damage  from  this  source  is  not 
great. 

Direct  pumping  systems  are  often  found  in  level  localities. 
The  pumps  should  be  large  and  strongly  built,  and  there  should  be  a 
duplicate  set  of  pumping  machinery.  Preferably  separate,  inde- 
pendent and  complete  pumping  plants,  including  both  boilers  and 
pumps,  should  be  provided.  It  is  necessary  to  have  the  fire  alarm 
systems  directly  connected  to  direct  pumping  stations,  so  that  the 
engineers  may  be  promptly  notified  that  an  extra  demand  for  water 
will  be  made  on  the  pumps. 

This  is  simply  a  gravity  system  with  pumps,  but  in  addition 
means  are  provided  whereby  the  pumps  can  increase  the  pressure  in 
case  of  fire  to  a  point  in  excess  of  the  pressure  which  could  be 
furnished  from  the  reser\oir  or  standpipe.  This  may  be  brought 
about  by  providing  a  check  \  alve  in  the  pipe  leading  from  the  reser- 
\o'n.  The  pumps  can  discharge  against  this  check,  closing  it  so 
that  the  pressure  may  be  increased.  This  is  a  convenient  wav  of 
utilizing  a  good  natural  gravity  supply  which  is  not  at  such  an  ele- 
vation as  will  give  good  fire  pressure.  In  this  case  the  pumps 
would  ordinarily  be  reserved  for  fire  purposes  only. 

This  system  is  similar  to  that  used  in  manv  large  protected 
risks,  where  bv  the  insertion  of  a  check  \  alve  tiie  tank  or  town  sup- 
]3lv  pressure  may  be  exceeded  by  the  assured's  pump. 

A  system    may  be  so  arranged  that   the   result  is  obtained   by 


WATER  WORKS  253 


closing  a  valve  in  the  pipe  leading  from  the  reservoir,  thus  enabling 
the  pumps  to  raise  the  pressvu'e  bv  pumping  against  the  closed 
valve.  Again  there  may  be  two  pump  discharge  pipes,  one  lead- 
ing directlv  to  the  reservoir  and  the  other  supplying  the  pipe  sys- 
tem. In  this  case  the  pipe  to  the  reservoir  would  be  shut  off,  thus 
enabling  the  pumps  to  discharge  directly  into  the  mains  at  a  high 
pressure. 


DISTRIBUTING  SYSTEMS 

The  best  kind  of  water  pipe,  and  that  most  universallv  used,  is  Pipes. 
cast-iron,  which  is  furnished  in  12  foot  lengths  with  a  bell  on  one 
end  and  a  projection  or  spigot  on  the  other,  the  bells  and  spigots 
fitting  together  and  being  so  formed  as  to  enable  a  strong  water- 
tight joint  to  be  made  when  melted  lead  is  poured  and  tamped  into 
the  joint.  This  pipe  is  about  one-half  inch  thick  and  comes  in 
varying  weights,  that  used  for  fire  purposes  and  in  general  water 
supply  work  weighing  30  to  35  lbs.  per  foot  for-  6-inch  pipe,  45  to 
50  lbs.  for  8-inch,  65  to  70  lbs.  for  10-inch  and  85  to  90  lbs.  for  12- 
inch.  Slightly  lighter  weights  are  used  for  suction  pipes  and  in 
other  cases  where  little  pressure  is  to  be  met  with,  such  as  that  part 
of  mains  from  reservoirs  which  is  located  on  the  higher  levels. 

Large  mains  from  reservoirs  are  sometimes  made  of  riveted 
steel,  usually  protected  by  cement  inside  and  out.  Some  reinforced 
concrete  pipes  are  in  use  in  large  sizes.  There  are  some  ccmoit 
lined  steel  pipes  laid  in  streets,  and  many  are  in  use  to-day.  They 
keep  clean,  maintaining  their  full  waterway  for  an  indefinite  period, 
as  tubercles  or  corrosion  do  not  form  on  the  cement  surface.  They 
have  a  long  life  if  not  disturbed,  but  when  tapped  for  branches, 
service  pipes,  etc.,  it  is  difficult  to  make  a  tight  joint  and  leakages 
and  deterioration  results.  These  weak  joints  break  out  under  high 
pressures,  making  such  pipes  unsafe  for  good  fire  protection  service 
if  used  in  congested  districts.  Cement-lined  pipes  are  especially 
likely  to  be  damaged  by  lightning  and  electrolysis,  as  the  discharges 
in  leaving  the  steel  pipe  to  pass  into  the  ground  must  pass  through 
the  cement  coating.  Many  towns  have  removed  cement  pipes  on 
account  of  this  trouble.  It  could  be  avoided,  however,  by  provid- 
ing good  electrical  grounds  at  frequent  intervals.  There  is  a  pa- 
tented pipe  sometimes  used  which  has  machined  joints  fitting  closely 
together  by  bolting.     A  tight  joint  is  obtained  without  jackets  or 


254  LECTURES  ON  FIRE  INSURANCE 


packing.  This  pipe  is  meeting  some  success,  hut  is  considered  not 
as  reliahle  as  the  standard  pipe.  The  town  of  Oxford,  Mass.,  has 
this  pipe  in  use. 

Some  large  conduits  from  reservoirs  have  heen  built  of  wood 
staves  and  give  good  service.  Very  old  pipes  in  New  England 
were  made  of  logs  bored  out.  Some  cast-steel  pipes  have  been 
used.  They  are  very  expensive  but  very  strong  and  durable. 
Wrought-iron  or  rolled  steel  pipe  should  not  be  laid  underground. 
Laying  Pipe.  Depth.     Pipes  should  be  laid  about  5  feet  deep  in  New  Eng- 

land to  be  safely  below  frost.  The  danger  of  freezing  is  more  in 
open,  gravelly  soil  than  in  clav  or  heavy  soil.  In  crossing  ditches 
or  other  places  where  burying  is  impossible,  the  pipes  should  be 
protected  from  frost  by  one  or  more  outer  and  larger  pipes,  the  lat- 
ter being  sealed  up  at  the  ends  to  form  dead  air  spaces  around  the 
water  pipe.  In  some  cases  other  insulating  methods  might  prove 
acceptable. 

In  laying  pipes  care  is  needed  to  keep  them  free  from  stones 
and  gravel  which  might  later  cause  great  damage  by  getting 
into  vahes,  hydrants,  steamei's  or  other  fire  fighting  apparatus. 
Each  length  of  pipe  should  rest  firmly  in  the  soil  for  its  entire 
length.  In  soft  land  piles  or  other  foundation  should  be  pro^■ided 
to  support  the  pipes.  Where  pipes  pass  under  railroads  or  where 
there  is  hea\y  trucking  over  soft  ground,  pipes  should  be  protected 
against  the  loads  from  above.  Turns  should  be  made  by  easy 
curves  and  at  liranches,  hvdrants  and  other  places  where  the  cur- 
rent of  water  may  suddenly  change  its  direction  of  flow,  iron  straps 
or  concrete  reinforcement   should  be  provided  to  take  the  thrust. 

If  possible,  pipes  should  be  tested  before  refilling  the  trench. 
No  large  stones  should  be  placed  directly  on  the  pipes  in  refilling 
trenches. 

In  making  joints,  oakum  or  jute  is  tampctl  into  the  foot  of  the 
joint  and  melted  lead  poured  in  to  fill  the  remaining  space.  The 
lead  is  then  compressed  by  tamping  it  firmly  in  place.  A  joint  in 
an  8-inch  pipe  requires  about  12  poimds  of  lead.  A  6-inch  joint 
will  require  8  to  10  lbs.  and  a  10-inch  about  15  lbs. 

Cast-iron  pipe  is  usually  and  always  should  be  dipped  in  tar  or 

asphaltum  at  the  place  of  manufacture.     The  pipe  should  be  hot 

when  this  is  applied.     It  is  a  good  protection  against  both  rust  and 

the  formation  of  tubercles. 

Hydrants,  A  quantitv  of    loose    stones    should    be    placed    U->    form    tlie 

Etc.  foundation  for  hydrants,   to  insure   proper    drainage.      In   wet    or 


WATER  WORKS  255 


low  places  it  may  be  necessary  to  plug  the  hydrant  drains  and  Hydrants, 
pump  out  the  hydrants.  Hydrants  should  be  located  \ery  thickly  Etc. 
in  congested  districts.  Long  hose  lines  cut  do\vn  pressure  a 
great  deal,  and  to  receive  the  full  benefit  of  the  water  supply  hy- 
drants must  be  placed  at  such  distances  apart  as  \vill  minimize  the 
amount  of  hose  to  be  used.  A  hydrant  should  always  be  located  at 
the  crest  of  a  hill  or  at  other  high  points  in  the  pipes  so  that  the  air 
collecting  at  such  high  points  can  be  blown  out  to  give  the  pipe  its 
full  waterway.  A  pocket  of  air  lodging  in  a  pipe  cuts  down  the 
cross  sectional  area  and  thereby  restricts  the  flow  of  water. 

In  cities  Lowry  or  flush  hydrants  are  often  used.  As  these 
are  flush  with  the  surface  of  the  ground  they  may  be  placed  in  the 
middle  of  the  street,  thus  avoiding  danger  from  falling  walls. 
Their  location  should  always  be  clearly  indicated  and  they  should 
be  kept  free  from  snow.  Post  hydrants  should  be  strongly  built 
and  designed  with  smooth  water  passages  so  as  to  minimize  the 
losses  of  pressure  from  friction.  Four-inch  pipes  are  too  small  to 
properly  supply  a  hydrant. 

Hose  threads  on  hydrants  should  fit  hose  of  neighboring  towns, 
so  assistance  could  be  given  in  cases  of  emergency.  The  National 
standard  hose  thread  should  be  used  where  not  conflicting  with  this 
feature.  Air  valves,  usually  automatic,  are  often  located  at  high 
places  on  the  mains  to  relieve  the  air  from  the  pipes.  A  vacuum 
valve  is  a  somewhat  similar  device.  It  is  used  to  admit  air  to  the 
pipes  to  enable  them  to  be  drained  of  water  to  make  repairs.  A 
proper  location  of  hydrants  will  usually  make  the  use  of  these  de- 
vices unnecessary. 

These  are  branch  pipes  with  valves  used  to  blow  mud  and 
sediment  out  of  the  pipes.  They  are  located  in  the  lower  places 
and  dead  ends  where  such  accumulations  collect.  A  hydrant  can 
be  used  as  a  blow-off  if  located  where  needed. 

Gate  Valves  should  be  provided  on  pipes  at  street  corners  Gate  Valves. 
to  sub-divide  the  system.  In  case  of  repairs  being  necessary,  these 
valves  permit  shutting  off  the  impaired  pipe  line,  leaving  the  re- 
mainder of  the  system  intact.  They  should  be  under  strict  super- 
vision, as  in  some  cities  carelessness  has  resulted  in  many  of  them 
being  left  closed.  At  an  inspection  in  Detroit  some  years  ago  about 
400  gate  valves  were  found  closed.  All  gate  valves  should  be  right 
handed  valves — those  which  close  by  turning  in  the  direction  taken 
by  the  hands  of  a  clock. 


256  LECTURES  ON  FIRE  INSURANCE 


Pressures  and  Friction  Losses. 
The  static  pressure  at  any  given  point  is  the  pressure  at  that 
point  due  to  the  head  of  the  water  from  the  pumps  or  the  reser- 
voir. To  obtain  the  actual  static  pressure  it  would  be  necessary  to 
stop  all  flow  in  the  pipes.  The  term  static  pressure,  as  commonly 
used,  is  really  the  dvnamic  pressure,  that  is,  the  pressure  under  ordi- 
nary conditions  of  flow,  and  it  is  always  something  less  than  the 
true  static  pressure.  Pressures  usually  are  slightly  higher  in  the 
night  than  during  the  day,  as  the  consumption  of  water,  and  there- 
fore the  rate  of  flow  in  the  pipes,  is  less.  In  speaking  of  pressures 
we  therefore  assume  that  the  water  is  flowing  at  a  more  or  less 
rapid  rate  in  the  pipes.  This  flowage  cuts  down  the  pressure  below 
the  static  pressure,  the  rate  of  reduction  varying  with  the  square 
of  the  velocity  ;  for  example,  the  loss  would  be  25  times  as  great 
if  the  flow  were  10  feet  per  second  as  it  would  be  at  2  feet  per  second. 
There  is  also  a  slight  direct  loss  due  to  the  velocity  which  rep- 
resents the  power  consumed  in  moving  the  water.  Flowage  losses 
are  directly  proportional  to  the  length  of  the  pipe,  if  the  diameter 
and  flow  be  constant ;  that  is,  the  loss  in  200  feet  of  pipe  would  be 
twice  that  in  100  feet  under  like  conditions. 

The  carrying  capacitv  of  pipes  is  roughly  proportional  to  their 
areas.  It  increases  a  little  more  than  in  the  proportion  of  the  in- 
crease of  the  areas  on  account  of  the  influence  of  surface  friction, 
the  exact  increase  being  proportional  to  the  square  root  of  the  fifth 
power  of  the  diameter.  A  6  inch  pipe  can,  under  the  same  condi- 
tions, carry  about  2.75  times  as  much  as  a  4  inch  pipe.  An  S  inch 
is  equal  to  2.05  6  inch  and  5.66  4  inch  pipes.  A  12  inch  pipe 
is  equal  to  5.65  6  inch  pipes. 

These  figures  are  important  to  bear  in  mind,  as  they  clearly 
show  the  false  economy  of  laying  small  pipes,  especially  as  the 
difference  in  cost  of  the  pipe  is  often  a  small  matter,  the  cost  of 
trenching  and  back  filling  being  about  the  same  for  4,  6  or  S  inch 
pipe  lines. 

It  consumes  energy  to  get  water  to  flow  through  pipes,  and  of 
course  the  larger  the  pipes,  and  the  smoother  the  inside,  the  less 
energy  in  the  form  of  pressure  will  be  lost.  We  can  readily  see 
that  if  water  enters  one  end  of  a  pipe  at  100  pounds  pressure  and 
we  draw  out  1,000  gallons  a  minute  at  the  other  end  of  the  pipe, 
that  water  will  be  delivered  at  less  pressure  if  the  pipe  is  6-inch 
than  if  it  were  S-inch.  The  loss  for  1,000  gallons  through  1,000 
feet  of  6-inch   pipe  would  be  50  to  TO  pounds,   depending  on  the 


WATER  WORKS  257 


smoothness  of  the  pipe.  The  velocity  in  this  pipe  would  be  about 
15  feet  per  second.  In  8-inch  pipe,  for  the  same  length  and  amount 
of  water,  the  loss  would  be  but  from  14  to  20  pounds  and  the  \e- 
locitv  about  8  feet  per  second. 

Bends,  elbows  and  turns  all  tend  to  increase  friction  losses  in 
pipes,  and  thev  should  be  avoided  as  much  as  possible. 

The  tables  generally  published  for  friction  losses  in  pipes  are 
mostly  figured  out  theoretically.  Actual  tests  by  careful  engineers 
have  shown  figures  indicating  that  we  should  add  50  to  1<H}<'^  to  the 
theoretical  tables  to  approximate  the  truth.  In  very  old  pipes  the 
losses  given  in  the  tables  should  sometimes  be  multiplied  by  three. 

The  formation  of  tubercles  and  corrosion  in  pipes  is  the  chief  Deterioration 
cause  of  their  reduction  in  carrying  capacity  due  to  age.  Corrosion  ^^  *P^^* 
results  from  corrosive  waters  and  is  not  very  serious.  Tubercles 
form  rapidly  in  waters  from  some  rivers,  ponds  and  lakes.  Tu- 
bercles seem  to  be  growths  forming  at  some  small  hole  in  the  tar 
coating  where  they  fasten  themselves  permanently,  being  fed  by  the 
iron  in  the  pipe  and  by  certain  impurities  in  the  water.  They  may 
grow  as  large  as  an  egg  and  become  quite  hard. 

A  12-inch  pipe  in  Lowell  laid  in  1849  was  taken  out  some 
years  ago  and  it  was  found  so  lined  with  tubercles  that  the  largest 
plug  that  could  be  passed  through  it  was  found  to  be  one  of  but  8 
inches  in  diameter.  It  was  my  good  fortune  to  have  aided  in  mak- 
ing a  friction  loss  test  on  this  pipe  prior  to  its  removal.  It  was 
found  to  be  about  equal  to  a  new  8-inch  pipe  in  its  carrying 
capacity. 

This  indicates  to  us  that  the  condition,  as  well  as  the  size  of 
a  pipe,  must  be  known  to  properly  judge  as  to  its  ability  to  deliver 
water. 

As  has  been  pointed  out,  the  location  of  pumps  and  reservoirs  Gridiron 
and  the  sizes  and  condition  of  pipes  all  influence  the  efticiencv  of  a  Systems, 
waterworks  system. 

One  very  important  feature,  however,  is  the  avoidance  of  so 
called  "  dead  ends."  It  is,  of  course,  impossible  to  avoid  all  dead 
ends,  but  especial  effort  should  be  made  to  lay  out  all  pipes  so  as  to 
form  loops  in  congested  districts.  This  is  really  necessary  for  a 
maximum  efficiency.  Of  course,  in  a  case  where  a  very  large 
loop  would  be  necessary,  it  might  be  as  efficient  and  more  eco- 
nomical to  substitute  a  "  dead  end"  of  a  larger  sized  pipe  than 
would  be  required  with  a  loop. 

Systems    with  pipes  connected  at  all    street  intersections  are 


258  LECTURES  ON  FIRE  INSURANCE 


Gridiron  known   as  "  gridiron  "  systems.      This  arrangement  gives  a   maxi- 

Systems.         mum  efHciency,  as  each  pipe  is  fed  at  least  two  ways. 

Water  would  flow  to  any  point  within  such  a  system  from  all 
directions.  The  pipe  sizes  in  such  systems  should  he  carefully  laid 
out  to  care  for  the  fire  protection  demanded  by  the  character  of 
the  buildings  and  the  probable  future  growth.  A  good  gridiron 
system  of  eight  and  six  inch  pipes  in  city  blocks  not  over  600  feet 
long  can  deliver  as  much  water  as  can  a  16-inch  pipe  at  the  same 
point,  other  general  conditions  being  equal. 

The  gridiron  system  should  be  fed  on  each  of  two  sides  rather 
than  in  the  center,  to  better  balance  the  flowage,  provide  for 
growth  and  to  preserve  one  main  feeder  in  case  of  damage  to  the 
other. 

In  communities  not  adapted  to  gridiron  systems,  the  pressure 
should  be  high  and  the  main  feeders  should  be  extra  large.  The 
city  of  Fitchburg,  Mass.,  has  an  excellent  water  supply,  although 
the  city  extends  along  a  narrow  valley,  the  surrounding  hills 
restricting  lateral  growth,  so  that  a  good  gridiron  system  cannot  be 
developed.  This  city  has  a  large  separate  reservoir,  feeding  into 
each  end  of  the  valley  with  20  and  16  inch  mains,  giving  a 
pressure  of  about  150  pounds  in  the  congested  district. 

Special  Higfh  Pressure  Systems. 

Of  late  years  the  problem  of  furnishing  fire  protection  for  the 
highly  congested  areas  of  our  large  cities  has  led  to  the  develop- 
ment of  special  tire  systems.  They  are  absolutely  independent  of 
other  water  pipes  and  are  for  use  in  case  of  fire  only.  Special  fire 
mains  of  large  capacity,  with  extra  strongly  made  joints,  are  laid  in 
the  districts  to  be  covered,  and  large  hydrants  are  located  at 
frequent  intervals.  The  purpose  is  to  concentrate  an  enormous 
quantity  of  water  at  any  given  point.  Usually  large  hose  (three- 
inch)  and  large  nozzles  are  used,  to  minimize  the  friction  loss  and 
furnish  powerful  streams. 

The  water  is  supplied  from  pumps,  which  may  be  fed  from  salt 
water  or  from  some  other  source  not  dependent  upon  the  usual  water 
supply.  Such  a  system  might,  however,  be  an  advantage  even  if 
the  pumps  drafted  from  the  domestic  water  system,  as  they 
could  deliver  the  water  at  a  high  pressure  and  could  probably  get 
water  even  in  a  large  conflagration,  if  the  suction  pipes  were  care- 
fully laid  out. 

The  Ne-w  York  high  pressure  system  is  the  best  example  of 


WATER  WORKS  259 


this  type  of  supply.  Two  widely  separated  fireproof  pumping 
stations,  centrally  located,  yet  free  from  severe  exposure,  each 
contain  hve  large  five  stage  centrifugal  pumps,  each  capable  of 
delivering  3,000  gallons  per  minute  at  300  pounds  pressure.  This 
gives  a  capacity  of  30,000  gallons,  15,000  from  each  station. 
Later  a  capacity  of  24,000  gallons  will  be  developed.  At  a  little 
less  pressure  these  pumps  can  deliver  5,000  gallons  each.  The 
pumps  are  driven  by  motors,  which  receive  their  energy  over  four 
independent  underground  cables  from  several  power  stations.  The 
pumps  usually  are  supplied  irom  the  city  mains,  but,  if  necessarv, 
they  can  draw  from  the  salt  water. 

Some  other  cities  have  high  pressure  systems,  varying  with 
local  conditions.  Boston  has  a  hydrant  system  covering  a  part  of 
the  down  town  district.  This  system  is  supplied  from  the  salt 
water  by  fire  boats,  which  can  couple  their  large  hose  to  the 
system  when  needed.  A  special  signalling  system  usually  accom- 
panies these  systems,  so  that  the  fire  chief  may  communicate 
directly  with  the  engineers  at  the  pumps. 

QUESTIONS. 

1.  State  the  essentials  of  a  water  supply  for  {a)  domestic 
consumption;  (6)  for  fire  service, 

2.  State  some  defects  likely  to  exist  in  privately  owned  water- 
works systems  and  why  thev  are  found. 

3.  State  some  regulations  sometimes  used  to  govern  the  use 
of  water  for  fire  protection  purposes. 

4.  Name  the  ordinary  sources  of  water  supplv,  giving  them 
in  their  order  of  preference  for  fire  purposes.  ( Assume  the 
pressures  ample  in  each  case. ) 

5.  Briefly  describe  some  types  of  water  storage  basins 
(including  tanks)  in  the  order  of  their  preference. 

6.  What  are  the  principal  features  of  a  gravity  system  ? 

7.  What  are  the  principal  features  of  a  direct  pumping  system  ? 

8.  What  are  the  principal  features  of  a  combined  direct 
pumping  and  gravity  system  ? 

9.  Name  some  of  the  points  needing  special  attention  in  lay- 
ing pipes  and  setting  hvdrants. 

10.  What  is  meant  by  "friction  loss  in  pipes?"  Describe 
fully.     What  affects  these  losses  ? 

11.  What  is  a  "gridiron  "  system?     State  its  advantages. 

12.  Name  the  essentials  of  a  good  high  pressure  special 
pumping  system  for  fire  service. 


260  LECTURES  ON  FIRE  INSURANCE 


BIBLIOGRAPHY 

Baker,  M.  N.  :  Manual  of  American  waterworks  :  history, 
details  of  construction  of  every  waterworks  in  United  States  and 
Canada.     611  p.  New  York,  1S97. 

Boston  Manufacturers  Mutual  Fire  Insurance  Company  :  Fire 
apparatus,  pumps,  pipes,  hydrants,  hose,  sprinklers  and  other  ap- 
pliances. Circular  No.  78.  2nd  Ed.  January  1,  1905.  Illus.  Pam. 
20  pages.     Boston,  1905. 

Crocker,  Edward  F.  :  High  pressure  service  in  New  York 
City.  Proceedings,  International  Association  of  Fire  Engineers, 
1910  :  95-108. 

Finnegan,  Joseph  B.  :  Municipal  water  supplies.  Rough 
Notes,  41  :  49. 

Freeman,  John  R.  :  Fire  stream  tables  for  use  of  inspectors 
of  The  Associated  Factory  Mutual  Insurance  Companies. 

French,  E.  V.  :  Loss  of  pressure  caused  b}'  meters  in  factory 
fire  supplies.  Journal  N.  E.  Waterworks  Association,  12:73-102 
(Dec.  1S97). 

Griswold,  F.  M.  :  Standards  for  town  water  supplv  and  fire 
protection,  British  Fire  Prevention  Committee.  Special  Report, 
International  Fire  Prevention  Congress,  1903  :  85. 

Hopson,  E.  G.  :  City  waterworks  systems.  Insurance  En- 
gineering (X.  Y.),  September,  1905. 

Johnson,  W.  H.  :  Organization,  etjuipment  and  management 
of  town  fire  departments.     Ins.  Engineering,  18  :9S-102. 

Moore,  Francis  C.  :  Waterworks  and  pipe  distribution.  Pam- 
phlet, 36  pp.  New  York,  1895. 

National  Board  of  Fire  Underwriters — Rules  and  requirements  : 
Hose  houses  for  mill  vards.     Pam.  24  p. 

National  standard  hose  couplings  and  hvdrant  fittings  for 
public  fire  service. 

Valves,  indicator  posts  and  hydrants  for  mill  vard  use.  Pam. 
32  p. 

National  Fire  Protection  Association  :  Reports  of  Committee 
on  High  Pressure  Fire  Systems.     In  Annual  proceedings. 

Owen,  Ira  J.  :  Notes  on  hydraulics.  393  p.  N.  Y.,  1907. 
(The  Ins.  Press.) 

Patton,  Alfred  G.  :  New  York's  high  pressure  system  for 
fire  protection.  Illus.  An.  proceedings.  National  Fire  Protection 
Association,  1909:144. 


MUNICIPAL  FIRE  ALARM  SYSTEMS. 

The  necessity  for  promptly  giving  alarms  to  fire  departments 
was  early  recognized,  and  I  think  I  am  safe  in  saying  that  the  facilities 
for  gi\ing  alarms  to  the  fire  departments  have  kept  pace  with  the 
advances  made  by  fire  departments  in  responding  to  alarms  through 
the  use  of  the  automatic  release  of  horses,  quick  hitching,  and  later 
the  automobile  apparatus.  That  is,  as  the  time  taken  by  the  fire 
depaitment  has  been  cut  down  in  answering  an  alarm,  so  has  the 
time  taken  for  giving  an  alarm  to  the  department  been  reduced. 

While  the  history  of  the  evolution  of  our  present  fire  alarm  p^gsent 
systems  is  interesting,  the  time  at  our  disposal  this  evening  is  Practice, 
sulficient  only  to  consider  the  present  methods  and  apparatus. 
Present  practice  for  practically  all  systems  is  for  the  use  of  what  is 
known  as  a  fire  alarm  telegraph  system  consisting,  in  brief,  of  boxes 
having  special  character  wheels  which,  when  operated  transmit 
alarms  by  causing  bells  to  strike  or  whistles  to  blow  in  a  certain 
order  so  that  a  definite  signal  is  given.  These  signals  are  repeated 
several  times,  each  repetition  being  called  a  round.  In  addition 
to  the  audible  signals  a  register,  either  of  the  pen  or  punching  type 
is  operated,  giving  a  series  of  dashes  for  the  pen  type,  or  a  series 
of  holes  for  the  punching  type,  on  a  paper  tape,  thus  providing  for 
a  permanent  record  of  the  alarms. 

As  notable  examples  of  cities  without    such   systems,    I    might  System  at 
cite   Kansas   City,  Mo.,  St.  Joseph,  Mo.,  and   Kansas  Citv,  Kan.,  Kansas  City, 
which  depend  for  their  fire  alarms  on  public  or  private  telephones.  ^°* 
A  brief  description  of  the  method  used  in  Kansas  Citv,  Mo.,  gives 
practically    that    used    in    all    of   these  cities.      This  city  has  over 
300,000   inhabitants,    with     two     independent    telephone    systems, 
which   in  1907  had  a  total  of  41,000  subscribers,  these  subscribers 
being  connected  to  nine  exchanges  over  single,  two  party,  and  four 
party  hnes.     At   the   fire   department  headquarters  is  a   telephone 
switchboard,  connecting  with  all  of  the  exchanges  and  also  with  all 
fire  department  houses. 


262  LECTURES  ON  FIRE  INSURANCE 


System  at  According  to  the  report  of  the  National  Board  of  Fire  Under- 

Kansas  City,  writers,  ahirms  are  transmitted  in  the  followinf^  manner  : — 
"'o*  "  On  a  call  of  fire,  the  operator  receiving  it   at   the  tele- 

phone exchange  connects  over  the  fire  trunk  with  the  fire 
department  exchange,  and  the  operator  there  asks  the  location 
of  the  fire  from  the  person  at  the  telephone.  Should  this 
person  be  too  excited  to  give  any  other  information  than  that  there 
is  a  fire,  the  monitor  operator  at  the  telephone  exchange,  who 
has  come  in  on  the  line  as  soon  as  connection  was  made  on  the 
fire  trunk  gives  the  operator  at  the  fire  department  exchange  the 
location  of  the  telephone  being  used. 

The  fire  call  is  then  sent  out  simultaneously  to  all  fire 
stations  and  the  man  on  watch  duty  answers  the  telephone 
while  the  horses  are  being  hitched  and  the  apparatus  is  usually 
ready  to  leave  the  quarters  when  the  operator  at  headquarters 
gives  the  location  of  the  fire  or  the  nearest  street  intersection  ; 
this  he  repeats  several  times  and  each  man  at  the  telephone 
repeats  it  to  make  sure  he  has  it  correctly.  Second  and  special 
alarms  are  sent  in  the  same  manner  by  the  chiefs  from  any 
telephone  available  near  the  fire." 

The  conclusions  of  the  National   Board  of  Fire  Underwriters 
of  this  system  are  interesting. 

•'While  the  system  of  sending  alarms  of  fire  by  telephone 
used  in  this  city  have  some  good  features,  yet  the  unnecessary 
waste  of  time  incident  to  the  repetition  and  rehandling  of 
alarms  may  in  many  cases  be  the  cause  of  serious  delay  in  the 
response  of  apparatus  ;  such  delays  are  liable  to  prevent  the 
extinguishing  of  fires  in  their  incipient  stage,  and  with 
the  ever  present  danger  of  incorrect  locations  being  given  by 
the  person  sending  in  the  alarms,  may,  if  continued,  be  the 
immediate  cause  of  a  severe  conflagration. " 
j^yjgg  At  the  last  meeting  (May  1911)  of  the  National  Fire  Protec- 

N.  F.  P.  A.  tion  Association,  the  Signalling  Committee  reported  rules  and 
requirements  for  the  installation  and  use  of  Municipal  Fire  Alarm 
Systems.  These  rules,  with  slight  amendments,  were  adopted,  and 
were  published  bv  the  National  Board  of  Fire  Underwriters  about 
the  middle  of  that  vear.  It  will  be  noted  by  these  rules  that  there 
are  four  classes  of  systems. 
Q^gjgg    £  Class  A.      To  apply  to  cities  of  100,000  population  or  over. 

Systems.  Class  B.     To  apply  to  cities  or  towns  of  less  than  100,000 

and  handling  over  300  alarms  per  year. 

Class  C.  To  iipply  to  cities  or  towns  of  less  than  100.000 
ha\  ing  more  than  one  circuit  and  handling  less  than  300  alarms  per 
vear. 

Class  D.      To  applv  to  towns  ha\  ing  a  single  circuit. 


MUNICIPAL  nRE  ALARM  SYSTEMS 


263 


As  Class  D  is  the  most  simple,  it  is  preferable  to  start  with  this 
class  and  then  work  up  to  Class  A. 

As  fire  alarm  systems  have  been  de\  eloped  in  this  country,  the   Simple 
simple  system  consists  of  a  closed  all  metallic  circuit,  on  which  are   System. 
placed  the  boxes  by  which  the  alarms  are  sent ;  the  battery  furnish- 
ing the  energy  for  releasing  the  devices,   and  the  tower  bells  or 
whistles,  fire  department  house  gongs,  and  recording  devices,  if  any. 

The  alarm  giving  devices,  by  which  I  mean  tower  liells, 
whistles,  gongs,  registers  or  indicators,  are  operated  electro- 
mechanically,  i.  e.,  the  power  that  causes  these  to  operate  is 
mechanical,   the  tower   bells   and  whistles   having   heavy    weights 


Gamewell  Gonw  and  Indicator. 


This  instrument  is  used  in  tire  stations  and  alarm  is  given  not  only  on  gontf,  but  first 
round  of  box  is  registered  on  visual  indicator  in  top  of  cabinet.  Indicator  requires  to  be 
pulled  down  after  each  alarm.  This  instrument  is  used  so  that  drivers  of  various  apparatus 
can  catch  number  of  box  at  a  glance  in  case  thcv  miss  count  of  the  bell. 


264  LECTURES  ON  FIRE  INSURANCE 

which  are  wound  like  tower  clocks;  the  gongs,  registers  and  indi- 
cators depending  upon  springs  which  are  also  wound  like  clocks. 
All  have  escapements  such  as  a  watch  or  clock,  and  are  restrained 
from  operating  by  means  of  pawls  engaging  with  these  escape- 
ments. These  pawls  are  held  in  position  to  prevent  the  operation 
of  the  de\ices  by  magnets,  the  magnets  being  energized  by  the  cur- 
rent. Should  the  circuit  open  from  any  cause,  the  pawls  will  drop 
and  thus  release  the  escapements.  This  will  cause  one  blow  to  be 
struck  on  the  gongs  or  bells,  and  one  blast  on  the  whistles.  Should 
the  circuit  now  be  closed,  the  pawls  engage  the  escapements  and 
are  ready  to  release  when  the  circuit  is  again  opened. 
Class  D.  Taking  up  the  apparatus  for  this  Class  D  system,  it  will  be 

noted  that  the  battery  recommended  is  of  the  primary  tvpe,  storage 
batteries  not  being  recommended,  except  when  some  reliable  source 
of  charging  current  and  proper  maintenance  can  be  provided. 
With  the  care  that  a  \illage  system  will  usuallv  recei\e,  it  is  not 
belie^■ed  that  a  storage  battery  will  give  as  reliable  service  as  a 
primary  one.  The  battery  should  be  located,  if  practicable,  in  a 
building  imdcr  control  of  the  municipalitv,  but  not  in  building  with 
local  telephone  office.  The  reason  for  this  is  olnious,  and  is  to 
prevent  derangement  of  the  fire  alarm  svstem  should  there  be  anv 
serious  trouble  at  the  telephone  station,  as  would  be  the  case  should 
a  fire  occur  in  the  building  containing  the  telephone  office. 
'J'  pg  q£  The  boxes  recommended  are  of  the  appro\  ed  non-interfering 

Boxes.  'iii(^  successive  type.      Such  boxes  are  those  that  are  so  designed 

that  should  a  box  be  sending  in  an  alarm  when  another  box  is 
pulled,  this  second  box  does  not  take  the  line  until  after  the  box 
that  is  striking  has  finished  when  it  "  steps  in,"  and  sends  in  its 
alarm.  We  then  receive  the  alarms  from  both  boxes.  Such  boxes 
are  expensive,  costing  about  $125.00  each,  and  manv  towns,  in 
order  to  save  expense,  use  a  "  plain  "  box,  that  is,  one  not  non- 
interfering  or  successi\e,  and  by  so  doing  cut  the  cost  to  less  than 
half  this  amount,  or  $50.00.  In  most  of  the  smaller  towns  an 
alarm  can  usually  ])e  heard  in  almost  all  parts,  and  it  has  been  felt 
by  many  that  there  is  little  liability  of  two  boxes  being  pulled  for 
the  same  fire.  However,  it  is  preferable  to  use  the  non-interference 
and  successive  box.  l^ut  few  kevless  boxes  are  installed  in  the 
smaller  towns,  present  practice  pro\  iding  a  key  in  the  door, 
covered  with  a  glass,  the  glass  to  be  broken  in  case  of  a  fire. 

Location  of  boxes  cannot  be  laid  down  bv   rule.      Usuallv  a 
town  starts  with  a  few  boxes,  somewhat  widelv  scattered.      As  time 


MUNICIPAL  FIRE  ALARM  SYSTEMS 


265 


\ 


r\\'X  /^L4/{/j 


tELiiaii/^fii 


Outside  Door  ot  Ganiewell  Succession  Bok. 


Tliis  door  is  provided  with  what  is  known  as  Cole  key-guard.  In  giving  an  alarm  of 
fire,  anyone  can  break  glass  in  small  door.  The  latter,  as  soon  as  released  by  break  mg  of 
glass,  drops  down,  throwing  broken  pieces  of  glass  away  from  box.  The  key  is  then  accessi- 
ble by  which  door  can  be  opened  and  hook  in.ide  pulled.  Directions  on  the  inside  door  are: 
"  Pull  hook  down  once  and  let  go." 


266 


LECTURES  ON  FIRE  INSURANCE 


Location  of     i?oes  on,  petitions  are  received  from  citizens  in  various  locations,  a 
Boxes.  box  or  two  being  voted  at  each  annual  town  meeting,  so  that  in  a 

few  years  the  town  may  have  a  fair  number  of  boxes,  but  the  loca- 
tions are  not  always  the  best.     As  the  rules  state,  in  the  mercantile 


Inside  Door  of  Gamewell  Box,  Opened,  Exposing  Movement. 

This  inside  door  can  be  opened  only  by  su])erintendent  of  lire  ahinn  or  eiiijineer  having 
key.     Movement  is  further  protected  by  round  shell  covered  with  glass  front. 


districts  boxes  should  l)e  so  located  that  a  person  woidd  not  ha\e  to 
tra\erse  o\er  5()0  feet  to  reach  a  box,  antl  in  the  residential  districts 
not  over  1,2()()  feet. 

Boxes    should    always    be    located   outside    of    btiildings.    but 


MUNICIPAL  FIRE  ALARM  SYSTEMS  267 

should  not  be  placed  on  poles  carrying  other  than   wires  of  low-   Outside 
potential  systems.  Wires. 

A  closed  metallic  circuit  should  be  used  without  grounds  or 
arrangements,  so  that  grounds  can  be  thrown  on.  As  was  stated 
when  discussing  the  National  Electrical  Code,  the  wires  should  not 
be  on  the  same  poles  with  electric  light  and  power  wires,  except 
where  unavoidable.  Where  it  is  necessary  for  the  tire  alarm  wires 
to  be  placed  on  such  poles,  they  should  be  placed  below,  instead  of 
above  the  electric  light  and  power  wires.  This  is  contrary  to 
general  practice,  but  I  belie\e  that  it  is  the  proper  place  for  two 
reasons : — 

1.  Fire  alarm  wires  are  more  liable  to  break  than  electric 
light  and  power  wires. 

2.  Where  below,  the  linemen  will  not  have  to  crawl  through 
the  high  tensicm  wires  to  reach  the  signalling  wires. 

For  fire  department  houses,  where  there  are  not  men  on  duty, 
only  a  register  is  necessary,  this  so  that  a  permanent  record  of  the 
alarms  may  be  made.  Outside  bells  or  whistles  need  no  comment, 
they  are  to  be  placed  so  that  the  firemen  can  hear  the  alarms. 
Where  constant  steam  pressure  is  not  available,  air  blown  whistles 
are  employed,  and  have  given  good  satisfaction.  A  system  shoidd 
be  tested  at  least  twice  daily,  that  the  condition  of  the  circuits, 
gongs,  whistles,  etc.,  may  be  known. 

The  system  which  I  have  tried  to  describe  is  only  applicable  to 
the  small  village  or  town.  As  the  system  is  extended,  a  point  is 
soon  reached  where  the  length  of  the  circuit  is  too  great  (requiring 
an  extreme  voltage  to  maintain  same).  It  then  becomes  necessary 
to  sub-divide  the  circuits,  and  our  svstem  comes  under  the  rules 
given  in  Class  C. 

Our  first  point  of  difference  is  the  headquarters,  now  necessary-.  Class  C. 
and  this  is  to  be  located  in  a  building  imder  municipal  conti'ol,  and, 
if  possible,  of  fireproof  construction.  A  fire  department  house 
or  a  town  hall  may  be  used,  if  of  suitable  construction.  If  the 
building  is  not  of  fireproof  construction,  then  the  rooms  used 
for  the  fire  alarm  headquarters  should  be  suitably  protected  from 
fire  in  the  balance  of  the  building.  The  town  of  Braintree,  in  this 
state,  is  shortly  to  erect  a  town  hall,  and  it  is  proposed  to  use  a 
portion  of  the  basement  for  the  fire  alarm  headquarters. 

With  the  circuits  sub-divided,  it  is  necessary  to  provide  some 
means  whereby  any  action  which  takes  place  on  one  circuit  will  be 
properly  transmitted  to  the  other  circuits.      This  is  done  liy  means  of 


2S8 


LECTURES  ON  FIRE  INSURANCE 


Class  C.  a  repeater,  which,   as  its  name   implies,    repeats  on   other  circuits 

connected  with  it   any   action   which   takes   phice   on   a  particular 
circuit. 

For  such  a  system,  our  source  of  energy  is  to  he  from  stora"e 
batteries,  with  duplicate  sets,  each  set  capable  of  operating  the 
system  for  60  hours,  a  total  of  120  hours,  or  equivalent  to  ti\e  full 
days.  Suitable  switchboards  for  batteries,  circuits,  terminals,  etc., 
are  reciuired.  Boxes  for  such  a  system  are  the  same  with  locations 
somewhat  the  same,  except  distances  between  the  boxes  are 
shortened.      Wiring  is  the  same  as  for  a  Class   D   system.     Tn  tire 


Gamewell  Repeater. 

This  repeater  is  used  where  more  than  one  circuit  is  required.  It  repeats  all  signals 
coming  from  one  circuit  to  all  the  others.  At  same  time  locking  devices  are  provided  so  that 
in  case  alarm  is  pulled  on  some  circuit  other  than  that  on  which  box  is  operating,  it  will  not 
interfere  with  correct  transmission  of  first  signal.  This  repeater  becomes  necessary  after 
there  are  more  than  20  boxes  installed  in  a  town. 


Class  B. 


department  houses,  gongs  and  registers  are  to  lie  pro\  ided,  so  that 
alarms  may  be  properly  received  at  these  places.  Outside  bells  and 
whistles  are  the  same  as  with  the  smaller  systems,  these  bells  or 
whistles  to  be  located  so  as  to  be  generally  heard. 

Class  B  systems  require  a  headquarters,  which  should  coniph' 
with  the  following  conditions  : — 

1.  A  fireproof  building  which  is  to  be  used  for  no  other 
purpose. 


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270  LECTURES  ON  FIRE  INSURANCE 


Class  B.  '2.     The  building  to  he  located  so  as  to  be  unexposed. 

3.  Apparatus  in  the  headquarters  to  be  so  designed  that  the 
system  may  operate  automatically  or  manually. 

4.  The  apparatus  arranged  so  that  the  alaruis  may  be  sent  by 
"  fast"  or  "  slow  "  time. 

For  a  system  to  supply  a  city  where  o\er  300  alarms  per  year 
are  handled  it  is  felt  that  the  headquarters  should  lie  a1)solutely  fire- 
proof, and  should  be  so  located  that  it  will  be  unexposed.  It  will 
be  noted  that  the  location  suggested  is  a  park  or  public  square. 
Such  a  building  may  be  made  artistic,  and  despite  the  experience  of 
Commissioner  O'Rourke  in  suggesting  placing  the  high  pressure 
pumping  station  on  the  Common,  I  ludieve  that  a  fire  alarm  head- 
quarters in  almost  any  locality  of  a  city  should  not  be  ol^jectionable 
to  the  citizens. 

In  the  apparatus  at  headquarters  considerable  change  is  made 
over  that  called  for  in  a  Class  C  equipment.  The  registers  and 
tappers  are  speeded  so  that  the  alarms  are  received  in  "  quick  "  or 
''  fast  "  time. 

By  "fast"  time  we  mean  a  speed  which  will  allow  from  three 
quarters  of  a  second  to  a  second  between  the  beginning  of  one 
blow  and  the  beginning  of  the  next  blow.  "  Slow"  time  is  wheie 
this  time  is  lengthened  to  two  seconds.  "  .Slow"  time  is  necessary 
when  outside  bells  or  whistles  are  used,  since  a  bell  or  whistle  can- 
not operate  with  less  than  two  seconds  between  the  beginning  of  one 
blow  and  the  beginning  of  the  next  blow. 

For  transmitting  these  alarms  one  of  two  methods  may  be 
used.  A  manual  "fast"  time  transmitter  is  provided,  which  is 
arranged  so  that  alarms  may  be  sent  manually  by  an  operator  or 
by  means  of  interlocking  switches  a  box  circuit  may  be  connected 
with  the  transmitter,  and  the  alarm  will  then  go  to  all  "  fast"  time 
circuits;  or  a  repeater  may  be  used  which  will  transmit  the  alarms 
the  same  as  they  are  transmitted  with  a  Class  "C"  system.  In 
addition  to  this  transmitter  or  repeater,  a  manually  operated  trans- 
mitter, speeded  for  both  "fast"  and  "slow"  time,  is  to  be  pro- 
vided for  sending  out  alarms  on  either  the  "fast"  or  "  slow  " 
circuits.  In  order  that  the  alarms  which  are  received  on  "fast" 
time  may  be  sent  to  the  outside  bells  or  whistles  on  "  slow  "  time, 
a  device  known  as  a  transformer  or  speed  reducing  machine  is 
required. 

Between  the  headquarters  and  the  fire  department  houses  two 
circuits  are   used,   one  on   which   the  "  fast  "  time   alarms,  and  one 


MUNICIPAL  FIRE  ALARM  SYSTEMS  271 

over  which  the  "  slow  "  time  are  sent.  Arrangements  are  also  re- 
quired by  which  headquarters  may  telegraph  over  each  box  circuit. 
Switchboards,  wiring,  etc.,  are  the  same  as  with  Class  C  or  D. 

Energy  for  operating  the  circuits  is  to  be  provided  by  either 
storage  batteries  or  motor  generators.  Boxes  are  the  same  as  for 
Class  C  or  Class  D.  In  the  fire  department  houses  6"  gongs  on  the 
"fast"  circuits  and  15"  gongs  for  the  "  slow"  circuits  are  required. 

With  Class  A  systems,  manual  operation  is  preferred,  princi-  Class  A. 
pally  because  a  station  becomes  too  complicated  if  we  attempt  to 
operate  it  automatically.  It  has  about  the  same  equipment  that  the 
Class  B,  but  is  to  have  at  least  two  competent  men  on  duty  con- 
stantly. Switchboards,  protectors,  and  wiring  are  not  changed  o\  er 
that  for  Class  B.  Fire  department  houses  and  outside  bells  or 
whistles  are  the  same. 

QUESTIONS, 

1.  What  are  the  four  different  systems  of  Municipal  Fire 
Alarm  as  recommended  by  the  National  Board  of  Fii"e  Underwriters  ? 

2.  Describe  the  system  recommended  for  the  smallest  towns. 

3.  What  ai'e  the  principal  types  of  fire  alarm  boxes  on  the 
market  ? 

4.  What  is  the  proper  location  of  fire  alarm  l^oxes  in  con- 
gested and  sparselv  settled  regions? 

5.  What  instruments  are  needed  in  the  Central  Station  in 
connection  with  a  fire  alarm  system  of  Class  A? 


PART  IV. 

FIRE  INSURANCE  POLICY 
FORMS  AND  CLAUSES 


FIRE  INSURANCE  FORMS  AND  CLAUSES 
FOREWORD 

The  following  pages,  devoted  to  the  subject  of  Fire  Insurance 
Forms  and  Clauses,  give  the  more  important  features  of  the  lectures 
on  that  subject  delivered  before  the  Boston  branch  of  the  Insurance 
Institutes  of  America  during  the  winter  of  11*11-12.  As  much 
that  was  said  in  those  lectures  was  of  an  explanatory  or  illustrative 
nature,  it  did  not  seem  wise,  on  account  of  both  time  and  space, 
to  record  it  here. 

The  fragmentary  style  of  these  Lecture  Reports  is  due  to  the 
conditions  under  which  they  were  prepared,  in  the  odd  and  often 
interrupted  moments  of  an  over  busy  life. 

Possibly  what  is  entered  here  will  serve  to  bring  to  the  minds 
of  those  who  were  present  at  the  lectures  the  unrecorded  portions. 
Those  to  whom  they  come  for  the  first  time  in  this  printed  form 
may,  quite  likely,  regard  them  as  incomplete  in  consequence  of 
what  is  unrecorded.  If,  howe\  er,  either  hearers  or  readers  are 
prompted  by  them  to  look  up  and  study  for  themselves  the 
principles  touched  upon,  they  will  have  accomplished  their  most 
important  purpose. 

W.  B.  Medlicott. 

INTRODUCTORY  AND  GENERAL 

It  is  difficult  to  imagine  a  more  comprehensive  title  than  the  ^  Compre- 
above.  Since  rules  and  forms  in  fire  insurance  are  almost hensivc Title, 
innumerable,  one  might  assume  that  it  would  be  as  easily 
possible  to  deliver  a  course  of  lectures  on  "•  Words"  (in  which 
event,  it  would  probably  be  best  to  refer  to  the  dictionary),  or  to 
make  an  interesting  and  profitable  talk  on  the  subject  of  "  Drugs 
and  Chemicals."  Probably  in  this  latter  case  the  voluminous 
pharmacopoeia  of  the  drug  trade  would  have  to  be  taken  as  a  text 
book,  for  since  words  and  substances  are  without  number,  so  it  may 
almost  be  said  are  the  forms  and  clauses  that  have  crept  into  use  in 
connection  with  fire  insurance  policies. 


276  LECTURES  ON  FIRE  INSURANCE 

A  Com-  When  tlie  subject  of  these  lectures  was  suggested  to  the  writer, 

prenensivc  j^  seemed  to  him  that  the  man  best  qualilied  to  deal  with  it  would 
be  either  a  broker  of  long  experience  or  the  counter  man  of  some 
large  city  agency,  for  the  opportunities  presented  to  men  occupying 
these  positions  are  vastly  greater  than  come  to  one  whose  connection 
with  underwriting  has  mainly  been  that  of  a  Home  Office  official. 
On  the  other  hand,  realizing  the  pressure  that  is  constantly  brought 
to  bear  by  the  assured  for  liberal  and  at  times  unjustifiable  provi- 
sions in  a  policy  form,  the  broker  or  the  counter  man  must  indeed 
be  made  of  heroic  material  if  he  does  not  become  deadened  to  a 
sense  of  the  Insurance  Company's  rights  and  allow  himself  to 
become  accustomed  to  viewing  the  contract  wholly  from  the  stand- 
point of  the  assured.  No  business,  especially  one  so  far  reaching 
in  its  operations  as  fire  insurance,  can  long  preyail  or  can  work 
lasting  good  to  the  entire  community,  unless  proper  consideration 
is  given  to  both  contracting  parties,  and  it  is  more  likeh'  that  those 
forms  which  will  best  stand  the  test  of  time  and  use  will  be  the 
ones  that  will  commend  themselves  to  the  underwriter  whose 
desire  for  business  causes  him  to  be  liberal  to  the  assured,  and 
whose  ambition  to  make  his  underwriting  a  success,  demands  a 
proper  caution.  In  speaking  to  you  then  of  forms  and  clauses, 
it  will  be  my  aim  to  emphasize  those  that  are  just  and  reasonable  to 
both  parties  to  the  contract  and  to  discourage  the  use  of  such  as  are 
wholly  one-sided  in  their  application ;  in  brief,  forms  and  clauses 
that  guarantee  the  assured  his  rights  and  at  the  same  time  safeguard 
the  insuring  company  against  uncontemplated  or  unreasonable  risk. 
Relation  of  Those  wdio  attended  the  lectures  of  last  year  on  the  Standard 

Forms  and    Policy  were  told  of  its  various  provisions.     In  order  to  take  up  the 
Clauses  to      subject  of  forms  and  clauses  intelligently,   it  will  be  necessary  for 
the  Standard  ^^^^  j.^  review  briefly  some  of  the  features  of  the  Standard  Policy  in 
°  ^'^^'  order  to  note  those   of   its  provisions,    which  may  legitimately  be 

affected  by  added  forms  or  clauses  and  those  which  should  never 
be  altered  in  the  slightest  degree  in  their  purpose  and  intent.  It 
may  be  well  at  this  point  to  say  that  the  only  wise  course  is  to  do  as 
little"  tinkering"  as  possible  with  the  .Standard  Policy  contract. 
Its  provisions  are  wise  and  equitable  and  protect  the  rights  of 
both  parties.  On  the  other  hand,  there  is  no  question  but  what 
under  certain  conditions  and  for  purposes  of  more  clearly  defining 
the  application  of  this  Standard  contract,  it  is  wise  to  attach 
such  clauses  as  shall  provide  for  special  conditions.  For  example, 
the    addition    of    any    clause    that    seeks  to  alter  or  set  aside    the 


FIRE  INSURANCE  FORMS  AND  CLAUSES  277 

method  of  procedure  in  the  poHcy  over  the  settlement  of  a  loss 
would  be  most  unwise,  illegal  and  prejudicial ;  or  the  waiving,  by 
rider  attached  to  the  policy,  of  the  conditions  of  cancellation  or  the 
contribution  of  other  interested  companies  ;  or  the  time  that  may 
elapse  between  the  adjustment  of  a  loss  and  the  payment  thereof, 
should  be  absolutely  avoided.  On  the  other  hand,  if  the  in- 
suring company  sees  fit  to  grant  the  storage  of  hazardous 
materials ;  or  to  waive  the  voidance  of  the  policy  on  account  of  the 
unoccupancy  of  the  premises  under  certain  conditions ;  or  to  allow 
the  operation  of  a  manufactui"ing  establishment  for  longer  than  the 
usual  work-day  period,  it  is  a  permission  that  they  undoubtedly 
have  the  right  to  grant  if  they  see  fit.  We  shall  later  take  up  in 
detail  some  of  these  provisions  that  can  and  that  can  not  be  wisely 
waived  ;  but  in  the  main  it  is  a  safe  rule  to  follow,  that  the  under- 
writer must  not  devise  or  accept  clauses  that  directly  contra^■ene 
and  set  aside  the  safeguards  for  either  party,  that  are  embodied  in 
the  Standard  policy  form,  nor  should  the  assured  demand  them. 

In  studying  this  broad  subject  of  forms  and  clauses,  one  finds   Authorities 
an    almost    unlimited    field   for    research,    and   while  it  would  be   on  Fo'^ms 
impossible  to  enumerate  all  of  the  sources  of  information,   I  want   ^"       ^"^" 
at  this  time  to  express  a  special  obligation  to  the  following  authors 
and  books  : 

Richards  on  "Insurance  Law." 

Moore's  "  Fire  Insurance  and  How  to  Build." 

Deitch,  "The  Standard  Policy." 

Hine's  "Book  of  Forms." 

Crawford's  "  Pointers  for  Local  Agents." 

Various  Manuals  of  Rules  and  Forms   promulgated  bj  the  different 

Underwriting  Bodies  here  in  the  East. 
Collections  of  forms  and  clauses  issued  by  certain  Insurance  Companies 

for  the  guidance  of  their  Agents. 

Now  what  are  forms  and  what  are  clauses.?     I  do  not  know   pv.rr 
that  I  ha\e  ever  seen  a  definition  broad  enough  to  clearly  define  the   Between 
difference ;   but  to  me  it  seems  in  a  general  way  as  if  for/us  zvere  Forms  and 
those  attachmeiits  or  riders  placed  on  an   uistirance  policy  that   Clauses. 
are  descriptive  in   their  nature^   while  clauses  are  the  attach- 
ments   or    riders  that  are  either  permissive  or    restrictive    in 
their  application.     By  this  I  mean  that  the  term   "form  "  may  be 
properly  applied  to  that  attachment  to  the  policy    that   describes 
who  is  insured,  what  he  is  insured  against  the  loss  of,  and  where  it  is 
located ;    while  clauses  may  define  what  can  be  allowed  that  the 


278  LECTURES  ON  HRE  INSURANCE 


policy  itself  may  or  may  not  prohibit,  what  provisions  there  may 
be  over  other  interests  than  those  of  the  party  holding  the  title  to 
the  propertv  or  some  agreement  that  shall  fix  conditions  of  liability 
in  the  event  of  loss  occuring.  These  are  only  a  few  of  the  per- 
missions or  restrictions  that  clauses  may  bring  into  the  policy 
contract,  but  will  serve  for  the  present  to  illustrate  the  line  of 
demarcation   between   forms    and  clauses. 

So  far  as  I  know  there  has  never  been  an  attempt  at  a  general 
classification  of  forms  and  clauses  and  such  classification  must  to  a 
large  extent  be  arbitrary.  In  order  that  we  may  take  up  the  study 
of  forms  and  clauses  in  a  consecutive  manner,  I  have  decided  to 
sub-diviJe  them  as  follows  : 

Classification 

of  Forms  and  1-   Those  of  description,  meaning  thereby  who  is  insured  and 

Clauses.  against  the  loss  of  what  he  is  insured  and  where  he  is  insured. 

2.  Forms  for  other  than  fire  liability,  such  as  Use  and  Occu- 
pancy, Rent,  Leasehold  Interest,  Profit  Insurance,  etc. 

3.  Forms  of  extended  area,  that  is  those  that  cover  the  loss  of 
certain  defined  properties  in  more  than  one  location.  Forms  of 
this  character  apply  especially  to  floaters  and  common  carriers. 

Clauses. 

1.  Clauses  of  permission,  such  as  permits  to  store  gasolene  or 
to  extend  operations  or  to  grant  builders'  permits,  etc. 

2.  Clauses  of  exemption  and  warrant,  such  as  spontaneous  com- 
bustion clauses,  consequential  damage  clauses,  electrical  permit 
clauses. 

3.  Clauses  of  title  and  insurable  interest,  such  as  the  Mortgagee 
Clause,  the  Leased  Land  Clause  and  the  Subrogation  Clause. 

4.  Clauses  for  special  emergencies,  such  as  the  Earthquake 
Clause,  the  Excess  Insurance  Clause,  Binders. 

.5.  Clauses  of  liability  limitation,  such  as  the  Average  Clause, 
the  Three-quarters  Loss  Clause,  the  Three-quarters  Value  Clause 
and  the  Co-insurance  Clause. 

We  might  also  add,  judging  from  occasional  practice  at  the 
present  time,  another  set  of  clauses,  which  could  well  be  entitled 
"  Clauses  of  Absurdity  !  "  Clauses  of  this  nature  are  ones  such  as 
some  of  our  western  states  seem  to  take  great  pleasure  in  indulging 
in.  Also  certain  ambitious  brokers  who  can  only  view  the  insurance 
contract  from  one  side,  namely,  that  of  the  assured,  are  very  fertile 


FIRE  INSURANCE  FORMS  AND  CLAUSES  279 

in  the  invention  of  clauses  of  this  character.  Chiuses  in  fact, 
which  have  the  general  effect  of  making  the  company  liable  no 
matter  who  the  assured  is,  what  he  may  do  and  when  or  where  he 
does  it,  clauses  that  are  broad  enough  to  cover  any  one,  anything, 
anywhere,  at  any  time.  A  simple  illustration  of  this  form  is  one 
that  has  recently  been  current  here  in  Boston,  where  a  sprinkler 
guarantee  was  attached  to  the  policies  with  the  provision  that  if  the 
sprinkler  was  not  kept  in  good  working  order  the  policy  should  not 
be  voided  thereby  !  A  clause  that  contradicts  itself.  Doubtless 
clauses  of  equal  absurdity  have  been  exploited  by  certain  of  the 
insurance  companies,  but  for  real  ingenuity  in  the  invention  of 
these  one-sided,  absurd  and  wholly  inequitable  clauses,  the  unscrup- 
ulous and  ambitious  broker  and  the  ignorant  law  maker  are  a  long 
way  in  the  lead. 

Like  everything  else  in  this  world,  forms  and  clauses  are  good 
or  bad  and  it  should  be  our  purpose  in  studying  them  and  seeking 
to  learn  their  real  meaning  and  effect,  to  aim  always  to  so  devise 
and  applv  them  as  to  work  the  greatest  measure  of  good  to  both 
parties ;  to  seek  to  avoid  one-sidedness  or  the  taking  of  a  position 
that  places  all  of  the  advantage  in  the  hands  of  one  of  the  contract- 
ing parties,  a  rule  that  should  apply  to  every  business  contract  of 
whatever  nature. 

In  studying   the  zvorking  of  any  form  or  cla7isc^    ahvays    The  View- 
take  the  viewpoint  of  the  loss.      It  matters  but  little  what  forms   point  of  the 
or  clauses  are  attached  to  the  policy  if  no  loss  occurs,  but  it  means   ^°^» 
a  great  deal  to  one  party  or    the    other    should    such    loss   occur. 
Therefore,    seek  to   place    yourself    in    your   study    of    forms    and 
clauses,  in  the  position  that  you  would  occupy  had  a  loss  occiu'red 
under  the  policy  and  you  were  seeking  to  accomplish  an  equitable 
settlement  of  the  resulting  claim. 

We  must  bear  in  mind  that  the  Standard  policy  is  itself  made  Provisions  of 
up  of  clauses  or  provisions,  and  it  is  well  at  this  point  to  call  par-  the  Standard 
ticular  attention  to  these  provisions,  as  they  must  always  be  con-  "o"cy. 
sidered   in  the  de\ising  of  either  forms  or  clauses  that  are  to  be 
attached  to  the  policy,  since  such  supplementary  forms  or  clauses 
either  modify  the  effect   of  or  completely  set  aside,  one  or  more  of 
these  so-called   "Clauses"  in  the  Standard  policy  form.      In  con- 
sidering this  phase  of  the  Standard  policy  clauses,  we  will  confine 
ourselves  to  those  of  Massachusetts  and  New  York  States,  since  in 
the   main  they   embody  all  of  the  important  features  of  any  well 
drafted  policy.      You  will  note  that   the  first  phrase  of  importance 


280 


LECTURES  ON  FIRE  INSURANCE 


Who  is 
Insured  ? 


What  is 
Insured  ? 


Term  of  the 
Insurance. 

Voidance 
Provisions  of 
the  Policy. 


in  cither  one  of  these  forms  is  the  naming  of  the  insurer,  the  con- 
sideration paid  bv  the  insured  for  the  protection  offered  liy  the 
insurer,  and  the  Hmitation,  or  that  is,  the  maximum  amount  that  can 
be  recovered  under  such  poHcy.  Also  in  the  Massachusetts  form, 
after  speaking  of  the  premium  consideration  the  words,  "  receipt 
nvJiereof  is  Jiei'eby  acknoivledged^''  are  inserted.  Now  it  would  be 
wholly  inadmissible  for  any  clause  to  be  attached  to  a  policy  that 
in  any  way  superseded  or  set  aside  these  provisions. 

The  next  phrase  of  importance  contains  the  words,  "  do  or 
does  insure.''  Remember  that  we  insure  people,  not  things,  and 
the  name  of  the  party  or  parties  seeking  the  protection  of  the  policy 
should  always  be  clearly  defined  at  this  point.  Also  the  fact  and 
nature  of  their  insurable  interest  should  be  beyond  question  and 
should  be  plainly  stated.  No  clause  should  be  attached  to  a  policy 
that  sets  aside  these  provisions  other  than  a  Payee  or  JNIortgagee 
Clause  relating  to  some  other  interest  in  the  propert}-  or  the  naming 
of  some  party  who  shall  act  as  attorney  for  the  assured  with  regard 
to  recovery  under  the  policy  in  the  event  of  loss. 

A  description  of  the  property  for  the  loss  of  which  the  insured 
is  to  be  indemnified  naturallv  follows  the  naming  of  said  insured, 
and  at  this  point  in  the  policy  the  insertion  of  a  descriptive  form  or 
rider  is  necessary.  This  form  ordinarily  describes  the  nature  and 
the  location  of  the  property,  but  in  the  event  of  the  indemnity 
offered  being  for  other  than  direct  loss  by  fire,  that  is,  for  insurance 
of  the  Use  and  Occupancy,  Rent,  Leasehold  Interest,  Profit,  etc., 
type,  it  is  necessarv  to  define  the  nature  of  this  insurance  in  connec- 
tion with  the  description  of  the  property  covered.  It  is  usual  to 
attach  to  this  form  of  description  such  further  clauses  of  permis- 
sion, restriction  or  limitation  as  may  be  mutually  agreed  upon. 

The  period  for  which  the  contract  shall  run,  or  the  term  of  the 
insurance,  is  one  of  the  policy  provisions  that  it  woidd  be  absurd  to 
seek  to  amend  or  alter  by  means  of  any  attached  rider. 

Following  the  description  of  the  property  we  find  in  the  policy 
contract  a  number  of  provisions  defining  conditions  under  which  the 
company  shall  not  be  liable,  in  other  words,  voidances,  such  as  con- 
cealment, or  misrepresentation  or  the  storage  of  hazardous  or  in- 
flammable compounds,  or  the  conduct  of  any  extra  hazardous  busi- 
ness. Also  losses  that  might  be  occasioned  by  invasion,  insurrection, 
riot,  civil  war,  military  or  usurped  power,  or  theft  or  neglect  of  the 
assured  to  use  reasonable  means  for  saving  or  preserving  property. 
Any  of  these  have  the  effect  of  rendering  the  contract  \  oid  and  free- 


FIRE  INSURANCE  FORMS  AND  CLAUSES  281 


ing  the  insuring  company  from  lialnlity.  Clauses  waiving  any  or 
all,  in  fact,  of  these  features  are  clearly  within  the  right  of  the  com- 
pany to  attach  to  their  policies,  if  they  so  elect. 

The  assumption  of  liability  for  damages  caused  by  lightning,    ^^Y 

not  covered  by  the  Standard  policy  contract  is  also  a  condition  that   ,,,,.. 

,,,,.,  ,        ,  ,  Liability  for 

the  nisurer  clearly  has  the  right  to  assume  by  the  attachment  of  a   j),jna,pe  bv 

proper  clause,  if  he  so  elect.  Lightning. 

That  portion  of  the  policy  providing  the  way  in  which  it  may 

be  cancelled,  it  is  clearly  e\  ident,  neither  insurer  nor  insulted  has  any   Provision  for 

right  to  change  nor  may  either  claim  any  other  method  of  procedure   ^^^^   l*°" 

Cannot  be 
than  that  defined  in  the  Standard  policy  contract,  and  a  clause  seek-   rj^,n„gj 

ing  to  effect  such  change  would  clearly  be  out  of  place. 

Mortgagee  interests  may  be  recognized  and  therefore  form  a   Other  In- 
proper  subject  for  the  attachment  of  a  clause  to  the  Standard  policy   surable 
contract.  ^''^^"'^'' 

The  removal  of  property  endangered  by  fire  to  a  place  of  safety    Provision 
as  provided  in  the  Standard  policy,  is  one  that  would  not  reasonably   over  Re- 
admit of  the  attachment  of  any  clause  to  the  policy  waiving  its  pro-   ™°^*  * 
visions,  and   it  is  most  unlikely  that  anyone  would  seek  to  devise 
such  a  clause. 

The  clause  in  the  contract  relating  to  the  way  in  which  losses  Provision  for 
shall  be  adjusted  and  paid  is  one  that  surely  admits  of  no  alteration   Arbitration 
or  amendment  by  the  addition  of  attached  clauses.  cannot  be 

In  short,  those  features  of  the  policy  that  define  clearly  its  ^  ^"ged. 
limitations  and  the  methods  of  procedure  thereunder,  do  not,  with 
any  sense  of  equity,  admit  of  alteration  or  amendment  by  the 
attachment  of  clauses,  while  permission  to  waive  certain  policy 
provisions  that  are  designed  to  safeguard  the  insurer  against  unusual 
hazards  or  the  protection  of  interests  other  than  those  of  the  party 
holding  title  to  the  property  are  clearly  provisions  that  admit  of 
special  treatment  such  as  can  only  be  accorded  by  the  addition  of 
proper  clauses.  Furthermore,  clauses  defining  the  relation  betw^een 
the  insurance  carried,  sound  value  and  loss,  are  all  of  them 
perfectly  proper  and  admissible,  provided  both  parties  agree  thereto. 

This  in  a  broad  way  defines  what  may  and  what  may  not  in 
the  Standard  policy  form  be  altered  or  modified  by  the  use  of 
attached  forms  or  clauses,  and  in  devising  forms  or  clauses  to  meet 
special  emergencies,  those  features  of  the  policy  which  we  have 
mentioned  as  being  distinctly  inadmissible  of  alteration,  should 
always  be  borne  in  mind  by  one  who  is  drafting  a  form  or  clause. 

It  is  well  at  this  time  to  emphasize  the  importance  that  attaches 


282 


LECTURES  ON  FIRE  INSURANCE. 


Desirability  to  standard  uniform  forms  and  clauses.  Forms  of  description  must 
of  Uniformity  of  course  vary  with  e\ery  different  property  or  assured  covered, 
in  orms  an  ^^^^^  clauses  or  forms  of  permission,  of  liability  limitation,  of  the 
assumption  of  other  than  tire  liability,  or  for  special  emergencies 
should  adhere  closely  to  some  prescribed  standard  that  meet  not 
only  the  views  of  the  underwriters,  but  also  commend  themselves 
to  the  insuring  public  as  a  whole. 

Before    we    begin  a  detailed  study    of    the    various    kinds    of 
forms  and  clauses,  there  are  a   few  matters  of  general   instruction 
both  in  policy  writing  and   in  the   devising   of  forms  and   clauses 
that  had  best  be  first  disposed  of. 
The  Con-  The  fire  insurance  policy  is  essentially  a  contract  of  perso)ial 

tract  One  of    indenniity.     It  is  true  that  some  of  our  State    Legislatures  in  their 
ignorance  have  seemingly  lost  sight  of  this  fact,  but  it  is  a  fact  and 


Personal  In- 
demnity. 


any  other  view  is  a  perversion.  Remembering  this,  that  the  policy 
is  a  contract  of  indemnity,  never  devise  or  consent  to  the  use  of  a 
form  that  makes  the  policy  a  contract  of  another  sort,  that  is,  a\oid 
all  forms  and  clauses  that  introduce  the  valued  feature  into  a  policy 
contract.  Possibly,  to  some  of  you,  it  is  not  \vholly  clear  just  what 
is  meant  by  "  valued."  It  means  the  so  wording  of  the  contract 
that  in  the  event  of  a  total  loss  the  value  of  the  destroyed  property 
is  the  amount  of  insurance  thereon,  wholh'  irrespective  of  what  its 
actual  value  may  be.  Policies  of  this  sort  are  a  premium  on  fraud, 
a  menace  to  the  community,  become  ultimately  a  burden  to  policv 
holders  as  a  whole  and  tend  to  lower  the  moral  standard  of  the 
locality  in  which  they  prevail. 

We  ordinaril}-  think  of  the  valued  policy  as  applicable  onh'  to 
buildings,  since  they  are  the  class  to  which  the  law  has  generallv 
made  applicable  a  contract  of  this  sort,  still  almost  unknowingly 
at  times,  forms  co^  ering  personal  property  are  allowed  to  slip 
through  that  contain  this  same  pernicious  \alued  feature.  For 
example,  any  form  or  clause  that  states  that  in  the  event  of  a  loss 
a  certain  fixed  sum  for  certain  specified  articles  is  agreed  upon  to 
be  their  actual  \alue,  entirely  sets  aside  the  important  indemnity 
feature  of  the  contract  and  may  work  great  injustice  and  ill,  usually 
to  the  insurer,  but  sometimes  to  the  insured.  Again  forms  or 
clauses  that  aim  to  fix  the  insurable  value  of  articles  destroyed 
(regardless  of  who  the  insured  may  be)  as  being  the  market  price 
for  such  articles  at  the  time  of  loss,  may  work  contrary  to  the 
principle  of  indemnity  that  should  ne\  er  be  lost  sight  of,  since  in 
this  obscure  way  profits  are  ofttimes  being  insured  as  well  as  the 


FIRE  INSURANCE  FORMS  AND  CLAUSES  283 

direct  fire  loss  or  damage.  Illustrations  could  be  multiplied  in- 
definitely of  the  way  in  which  this  valued  feature  creeps  into  the 
wording  of  forms  and  clauses,  sometimes  innocently,  inore  often 
with  intent  on  the  part  of  the  framer  of  the  form,  and  it  is  always 
desirable  to  bear  in  mind,  in  the  devising  of  any  clause,  descriptive 
or  otherwise,  to  see  to  it  that  this  pernicious  principle  shall  not 
even  in  the  least  degree  prevail. 

Just  a  few  general  instructions  as  to  what  might  be  termed  the  ^,  „  , 
'•''  headhig  of  a  policy''^  and  we  will  then  proceed  to  the  direct  jngs  of  the 
subject  of  forms  and  clauses.  The  policy  writer  at  the  outset  has  Policy, 
before  him  a  printed  form  of  contract,  the  Standard  policy  of  the 
State,  and  his  first  attention  should  be  to  enter  clearly  the  amount 
or  limitation  of  the  policy.  Coupled  with  this  is  the  consideration 
or  premium  for  which  the  policy  in  question  is  issued,  this 
bears,  by  virtue  of  the  rate,  a  certain  fixed  relation  to  the 
amount.  Then  follow  the  words  "  does  insure  "  or  "do  insure  " 
and  the  name  of  the  insured  party,  and  the  entering  therein 
of  this  name  calls  for  more  careful  consideration  than  oftentimes 
is  given  it.  Avoid  initials,  write  the  name  or  names  as  fully  as 
possible.  Avoid  ambiguous  phrases,  such  as  "  Heirs  of  So  and 
So  "  or  "  So  and  So,  et  al."  unless  at  the  same  time  you  designate 
some  one  party  who  is  empowered  to  act  for  all.  It  is  easy  to 
forsee  the  embarrassment  and  difiiculty  that  may  arise  in  the  event 
of  a  loss  under  policies  where  this  broad,  vague  way  of  defining  the 
insured  parties  may  appear.  In  the  former  event,  it  is  at  times 
impossible  to  know  who  all  of  the  heirs  are,  and  should  a  loss  be 
settled  without  the  concurrence  of  each  one  of  them,  and  possibly 
paid,  there  is  nothing  to  hinder  the  ignored  heir  later  on  from 
turning  up  and  justly  claiming  and  probably  securing  recognition 
of  his  or  her  rights.  The  "  et  al."  feature  which  sometimes 
appears  where  there  are  several  owners,  easily  leads  to  the  same 
confusion  and  possibly  double  payment,  since  "  et  al."  is  a  very 
difficult  party  to  locate  with  certainty  ! 

Not  only  is  it  necessaiy  to  name  the  assured  in  a  clear  and 
unmistakable  manner,  but  in  the  event  of  his  interest  in  the 
property  being  other  than  that  of  sole  and  unconditional  ownership, 
such  fact  must  be  clearly  brought  out.  Cases  where  there  are  joint 
interests,  or  where  individuals  are  transacting  business  under  a 
trade  name,  the  nature  of  the  assured's  interest,  in  the  former  case, 
and  the  individual  names  as  well  as  trade  name,  in  the  latter 
instance,  should  be  clearly  entered  upon  the  policy. 


II. 


''Who  "is 
nsured  ? 


"  What "  is 
Insured 
Forms  ? 


FORMS  OF  PROPERTY  DESCRIPTION  AND 
LOCATION 

In  our  last  lecture  we  spoke  of  "who"  was  insured  and  in  a 
general  way  touched  upon  the  various  provisions  of  the  Standard 
policy  contract  as  a  whole.  Certain  things  that  it  was  desirable 
to  avoid  in  defining  "who"  the  Assured  is,  have  also  been  spoken 
of.  Now,  naturally  follows,  "what"  is  it  that  we  insure  these 
parties  against  the  loss  of? 

We  must  again  impress  upon  your  minds  the  question  of 
viewpoint  or  attitude  that  it  is  always  essential  to  take  in  devising 
a  form  that  is  to  be  attached  to  the  policy  contract.  The  view- 
point of  the  loss  is  the  only  safe  one  to  take.  Look  at  the  form 
that  you  devise  as  you  would  had  a  loss  occurred  on  the  property 
which  it  is  designed  to  cover.  Any  other  point  of  view  is  value- 
less. 

Another  fact  to  remember  in  the  drafting  of  any  contract  form 
is  that  such  form,  if  the  contract  is  to  be  a  thoroughly  satisfactory 
one,  must  represent  the  idea  that  is  in  the  minds  of  both  parties 
to  the  contract,  that  is,  the  contract  should  always  be  effected  by 
the  getting  together,  as  we  might  say,  of  the  minds  of  these  two 
parties.  A  contract  that  means  one  thing  to  one  of  the  contract- 
ing parties  and  another  thing  to  the  other  is  a  trouble-breeder 
that  is  most  prolific. 

In  speaking  of  the  forms  that  are  attached  to  the  policy 
contract,  we  termed  them  as  being  riders  that  are  descriptive  in 
their  nature,  and  in  the  first  class  of  such  forms  are  those  that 
describe  the  property  against  the  loss  or  damage  to  which  by 
fire  the  insured  is  to  be  protected.  While  forms  determine  also 
the  nature  of  the  indemnity  offered,  if  other  than  that  of  direct 
fire  loss,  such  for  example  as  use  and  occupancy,  it  is  our  purpose 
at  this  point  to  confine  our  attention  to  those  forms  that  describe 
the  property  itself,  wholly  irrespective  of  whether  the  covering 
is  against  direct  loss  by  fire  or  loss  of  someother  nature. 


FORMS  OF  PROPERTY  DESCRIPTION  AND  LOCATION       285 


It  is  the  form  also  that  determines  whether  the  insurance  is 
to  be  of  the  specific  or  of  the  blanket  or  compound  type,  or 
whether  the  policy  is  to  be  of  the  usual  kind  or  an  open  one  or  a 
floater,  that  is,  whether  it  limits  the  property  covered  to  that  of 
one  kind,  in  one  described  location,  or  of  several  kinds  in  several 
described  locations,  or  for  a  fixed  or  a  variable  limit  in  amount 
covered,  or  anywhere  within  certain  more  or  less  widely  defined 
limits. 

Now,  while  you  all  probably  know  just  what  we  mean  by  a 
specific  and  what  by  a  compound,  as  well  as  by  an  open  and  by  a 
floating  policy,  still,  possibly  some  of  you  do  not,  and  so  we  will 
try  and  define  the  same. 

A  Specific  Policy  is  one  that  covers  property  of  one  kind  or  Specific 
class  in  one  fixed  location,  or  that  applies  to  an  aggegate  sum  Policies, 
apportioned  in  fixed  amounts  between  various  different  proper- 
ties, or  in  various  defined  locations.  For  example,  a  policy  of 
$5,000  on  one  building  alone  is  specific,  or  for  $5,000,  stating 
that  $2,500  each  is  to  apply  on  two  described  buildings,  is  also 
specific. 

A  Blanket  or  Co?)?pound  Policy  is  one  offering  a  contrast  to  Blanket  or 
the  Specific  form,  in  that  it  covers  properties  of  different  classes  Compound 
or  in  different  locations  without  apportionment  or  distribution, 
as,  for  example,  a  policy  of  $5,000  on  a  manufacturing  plant  in 
its  entirety,  including  buildings,  machinery  and  stock,  but  not 
defining  how  much  is  insured  on  each  one  of  these  items,  or  if 
the  plant  includes  more  than  one  building,  how  much  is  insured 
in  or  on  each  one  of  these  buildings. 

A/i  Open  Policy  may  be  either  specific  or  blanket  in  its  Open 
application.  It  is  a  policv  that  is  sometimes  called  a  "running"  Policies, 
policy  and  it  is  used  where  the  Assured  will  be  likely  to  require 
many  successive  insurances  from  the  same  company.  It  covers 
properties  (usually  merchandise)  in  such  amounts  and  in  such 
places  (usually  warehouses)  and  at  such  rates  of  premiums,  as 
shall  from  time  to  time  be  agreed  upon  and  endorsed  on  the 
policy,  or  in  a  book  attached  to  the  same.  The  object  of  such  a 
policy  is  to  do  away  with  the  execution  of  a  new  policy  for  every 
transaction.  Policies  of  this  form  are  most  frequently  used  where 
stocks  of  merchandise  are  continually  being  placed  in  or  with- 
drawn from  a  storage  warehouse. 

A  Ploatiiig  Policy  is  one  that  is  very  broad  and  general  in 
its    application,    since    it   may  cover   certain    specified   properties 


286 


LECTURES  ON  FIRE  INSURANCE 


Floating 
Policies. 


Excess 
Policies. 


anywhere  within  more  or  less  widely  defined  limits.  vSuch  prop- 
erties cannot  be  specifically  described  because  of  constantly 
changing  quantities  and  locations,  such  as  merchandise  or  other 
property  in  transit.  The  amount  covered  under  such  a  form  of 
policy  can  only  be  determined  at  the  time  of  loss  under  the  same. 
A  popular  definition  of  a  Floater  policy  is  that  it  is  one  that  hovers 
over  a  property  until  at  some  point  that  property  is  subjected  to 
a  fire  and  then  lights  on  the  fire. 

A//  Excess  Policy  is  also  something  of  a  Floater  in  its 
nature  and  only  attaches  to  insured  property  to  an  excess  of  value 
that  the  direct  insurance  on  that  property  does  not  cover. 

Description  of  Property 

In  drafting  the  form  that  shall  describe  clearly  and  concisely 
the  property  covered,  the  greatest  care  should  be  used.  Just 
what  is  covered  should  be  made  a^Dparent  without  question,  and 
not  only  should  the  intent  of  the  insurer  be  clear  in  the  mind  of  the 
framer  of  the  form,  but  the  expressions  used  in  these  forms  should 
leave  no  doubt  as  to  what  that  intent  was.  There  is  nothing  more 
annoying  to  both  insurer  and  insured  than  to  have  a  dispute  arise 
over  a  loss  on  the  ground  that  something  not  defined  in  the  policy 
was  meant  to  be  covered  by  the  form  used,  but  which  apparently 
was  not.  Policy  writers  who  fall  into  this  too  common  error, 
are  members  of  that  dangerous  class  of  humanitv  who  "mean 
well,"  but  do  not  "do  well  I"  One  feature  of  the  form  that  must 
always  be  kejDt  in  mind,  is  that  if  there  is  a  discrepancy  in  an 
insurance  contract  between  the  Standard  policy  provisions  and 
the  written  form  or  rider  attached,  the  latter  will  always  prevail, 
because  it  will  be  assumed  by  the  courts  that  such  riders  are 
inserted  with  reference  to  the  special  printed  contract  to  which 
they  are  attached,  and  therefore  supersede  it.  This  is  another 
reason  for  care  in  drafting  any  form  that  is  to  become  a  part  of 
the  policy  contract. 

A  form  in  the  sense  that  we  are  now  considering  it,  namely, 
that  of  an  instrument  of  description,  does  not  tend  to  set  aside 
any  of  the  printed  provisions  of  the  Standard  policy.  That 
function  is  confined  to  clauses  as  we  have  defined  them.  Even 
with  this  distinction  though,  the  importance  of  forms  is  not  les- 
sened, for  if  the  form  be  bad,  no  amount  of  modifying  clauses 
can  set  it  right,  and  can  only  result  in  a  contract  that  is  full  of 
contradictions.      Then,  too,   the   underwriter  in    considering   any 


FORMS  OF  PROPERTY  DESCRIPTION  AND  LOCATION       287 


risk,  first  looks  at  the  form  and  if  that  is  bad,  either  in  the 
description  of  the  property  covered  or  the  way  in  which  it 
applies,  he  usually  gives  no  further  consideration  to  the  offering, 
but  turns  down  the  whole  proposition.  Forms  present  more 
opportunity  for  the  ingenuity  of  the  policy  writer  than  clauses, 
since  the  latter  are  usually  standard  to  the  extent  of  every  word 
used  in  them,  while  forms  are  necessarily,  to  a  large  extent, 
optional,  and  even  \vhere  standards  are  used,  in  the  preparation 
of  forms,  it  is  more  a  standard  of  arrangement  and  classification 
than  of  prescribed  descriptive  language. 

In  the  framing  of  forms,  it  must  ever  be  kept  in  mind  by  the 
policy  writer  that  if  there  is  any  ambiguity  in  the  expression  or 
description  used,  and  litigation  should  ensue,  the  court  will 
always  decide  in  favor  of  the  insured  party,  where  any  other  than 
one  interpretation  is  possible.  This  attitude  on  the  part  of  the 
courts  is  not  unreasonable,  since  the  issues  that  arise  under  forms 
in  dispute  are  always  on  those  designed  to  protect  the  insurer, 
and  if  they  are  doubtful,  such  doubt  might  tend  to  invalidate  the 
entire  contract.  Then,  too,  the  contract  is  always  made  by  the 
insurer  and  is  prepared  on  the  good  faith  of  the  insured. 

Forms  are  seldom  drafted  by  the  party  who  has  to  adjust  the 
loss  for  the  company,  if  one  occur.  This,  too,  calls  for  care  in 
the  part  of  the  policy  writer.  Words  should  be  used  by  him 
that  will  be  as  clear  to  the  adjuster  and  to  the  insured  as  they  are 
to  the  party  who  framed  them.  The  Standard  policy,  de\'ised  as 
it  was  by  the  best  of  legal  and  underwriting  talent  available,  often 
has  its  wisest  provisions  entirely  set  at  naught  by  the  ignorant 
act  of  an  inexperienced  form  writer. 

An  old  underwriter  once  said  that  ''if  the  Standard  policy 
was  drafted  in  Heaven,  the  Devil  himself  must  have  been  the 
author  of  many  of  the  forms  and  clauses  that  are  in  use." 
Experienced  adjusters  probably  have  no  doubt  of  this,  for  care- 
lessly drawn  forms  cause  much  to  be  said  and  done  that  will 
surely  tend  to  swell  the  ranks  of  the  followers  of  the  Prince  of 
Evil. 

The  company  whose  forms  are  blindly  or  carelessly  drawn, 
suffers  both  in  the  trouble  that  ensues  therefrom,  in  the  business 
they  get,  and  even  more  from  the  business  that  they  do  not  get, 
owing  to  the  ill  reputation  they  acquire. 

Now,  what  are  some  of  the  evils  that  result  from  carelessly 
drawn  forms  of  property  descrij^tion?     .Such  description  must  tell 


Phrases. 


288  LECTURES  ON  FIRE  INSURANCE 

what  the  property  is  and  where  it  is.  This  surely  seems  easy, 
but  how  often  the  adjuster  finds  himself  in  grave  doubt  as  to  these 
very  features,  owing  to  a  doubtfully  worded  form. 

Some  of  the  troubles  that  arise  from  poor  wording  of  the 
"tf/za/"  in  a  form  are  the  comprehensiveness  of  the  descriptions. 
In  his  desire  to  cover  all  the  insured  ought  to  have  covered,  the 
policy  writer  may  draw  up  a  form  that  can  easily  be  construed  to 
include  things  never  intended  to  be  included,  and  oftentimes 
even  those  that  are  prohibited.  For  instance,  the  phrase,  "stock 
of  drugs"  can  be  held  to  include  gasolene  in  any  amount. 
Trouble-  '■'■  Szcc/i   other  goods  as  are  usiially  carried  fo7' sale''  \%   an- 

breeding  other   description  of   property  that   it    is  very  desirable   to  avoid. 

What  does  "usually  carried"  really  mean?  Take  for  illustration 
the  contents  of  a  general  store.  Pretty  much  everything  salable 
at  some  time  or  other  is  handled  in  such  a  store,  and  a  form  that 
winds  up  with  the  above  phrase  would  hold  the  insurance  com- 
pany liable  for  explosives  or  volatile  oils  kept,  even  though  it 
was  not  the  intent  of  the  agent  to  cover  them,  even  though  the 
insurance  company  had  no  idea  such  hazardous  materials  were  a 
part  of  the  stock  carried,  even  though  the  rate  on  the  property 
was  made  with  no  contemplation  of  the  existence  of  such  hazards, 
and  even  though  they  might  prove  to  be  the  direct  cause  of  the 
destroying  fire.  The  agent  who  loves  to  use  this  broad  phrase  in 
order  to  be  sure  and  get  everything  his  customer  has  or  may  have 
under  cover  would  probably  say,  ''Why,  it  is  not  usual  to  keep 
such  hazardous  things,  so  my  form  does  not  cover  them."  It 
does  though,  for  even  if  in  some  places  a  special  rate  is  made 
and  an  additional  premium  charged  for  the  extra  hazard  of  their 
presence,  and  perhaps  they  might  be  clearly  specified  too,  in  the 
form,  it  establishes  the  fact  to  the  courts  at  least,  that  it  is  not  un- 
usual to  find  such  merchandise  kept  in  the  stock  of  general 
traders. 

''^Usages  of  their  trade.'"  The  word  "usage"  is  one  we 
often  find  in  insurance  forms  and  one  that  is  easily  capable  of 
misinterpretation.  We  know  that  forms  devised  for  special  lines 
of  either  mercantile  or  manufacturing  business  probably  seek  to 
conform  to  the  usages  of  the  trade  protected,  and  to  consider  the 
special  practices  and  privileges  that  such  trade  might  require; 
perhaps  these  requirements  are  constant  in  the  business,  perhaps 
they  are  only  occasional  or  temporary,  but  if  necessary  to  the 
conduct  of  the  special  business  to  which  they  apply,  the  fact  that 


FORMS  OF  PROPERTY  DESCRIPTION  AND  LOCATION       289 


they  are  temporary  rather  than  constant,  does  not  void  the  con- 
tract. Bar  then,  the  use  of  this  word  "usage,"  as  it  may  be  much 
more  comprehensive  than  the  policy  writer  intended. 

This  makes  it  all-important  that  the  policy  writer  in  draftingManufac- 
a  form  to  cover  a  certain  manufacturing  plant,  for  illustration,  *"""g  f^^*"* 
should  not  incorporate  the  phrase,  ''and  all  other  materials  neces- 
sary for  their  use,"  ox  '"incident  to  the  prosecution  of  their 
business  f  unless  he  knows  absolutely  what  such  materials  might 
be  and  whether  they  involve  hazards  not  contemplated  by  his 
insuring  company  in  issuing  the  policy,  nor  features  considered 
in  the  fixing  of  the  rate.  The  same  caution  should  exist  in  draft- 
ing a  form  covering  the  insured  while  he  may  carry  on  ''such 
processes  as  are  incident  to  his  business."  Not  only  should  the 
policy  writer  be  absolutely  certain  of  his  own  position  and  under- 
standing when  he  uses  these  expressions,  but  he  should  be  equally 
sure  that  the  insuring  parties  know  them  just  as  clearly  and  as 
fully  as  himself,  and  that  their  understanding  agrees.  Under 
such  conditions,  the  use  of  such  articles  and  processes  may  lead 
to  no  ditticulties  in  the  event  of  loss,  without  it  trouble  is  more 
than  likely  to  arise,  since  "incident  to  his  business"  is  a  very 
comprehensive  phrase. 

For  instance,  suppose  you  have  a  form  describing  a  certain 
manufactory  producing  advertising  novelties.  Trade  conditions 
have  brought  the  use  of  celluloid,  often  in  its  most  highly  com- 
bustible form,  into  more  or  less  common  use  in  processes  of  this 
sort.  A  line  in  the  form  describing  in  a  general  way  the  property 
covered  and  closing  with  the  words,  "and  all  other  articles  or 
materials  incident  to  his  business, "  would  allow  the  assured  to 
use  this  hazardous  celluloid,  though  probably  the  factory  had 
been  rated  when  no  such  extra  hazard  existed,  nor  from  the  form 
used  would  the  insurance  company  realize  that  they  were  taking 
on  an  uncontemplated  hazard.  A  form  like  this  can  only  be  safe 
for  the  insurer  when  there  is  an  insertion  or  addition  calling 
special  attention  to  the  possible  use  of  celluloid  or  other  haz- 
ardous materials. 

The  use  of  the  words  '^merchandise"  or  "' contents'"  without  Merchandise. 
any  explanation  or  restriction  is  another  most  unwise  practice  in 
devising  forms.  What  is  "merchandise?"  Anything  in  the 
way  of  stocks.  "Contents"  is  even  more  comprehensive,  since 
it  may  cover  machinery  as  well  as  any  form  of  stock.  So  the 
insuring  of  merchandise  or  contents  without   restriction   for   any 


290  LECTURES  ON  nRE  INSURANCE 

party  may  be  construed  to  cover  anything  from  pig  iron  to 
benzine  or  from  fire  bricks  to  millinery,  should  he  elect  to  keep 
them!  Possibly  you  think  this  is  too  palpable  an  error  foranvone 
of  even  moderate  sense  to  write  into  a  policy  form  or  to  even 
Merchandise  think  of  committing,  but  as  I  write  this,  I  have  before  me  a  form 
Forms.  used   to  some  extent   in  a  nearby  state,  reading,  "on  all   the   con- 

tents   pertaining    to    or    used    in    the    business    of    the    assured, 

contained   in   the  brick  building,  situated ,  occupied  as 

warehouse  and  workroom."  This  is  an  actual  form  in  use. 
You  will  note  it  does  not  even  specify  the  business  of  the  assured. 
Investigation  in  this  particular  case  revealed  the  fact  that  his 
business  was  warehousing,  which  made  the  form  even  worse. 
Can  you  think  of  any  class  of  materials,  or  any  process  of  manu- 
facture or  any  custom  of  trade  that  such  a  form  would  not  cover? 
To  submit  one  like  this,  the  broker  or  policy  writer  must  be 
either  a  fool  or  a  knave, — to  accept  it  the  underwriter  is,  beyond 
question,  the  former! 

Possibly  the  broker  may  say  it  is  his  duty  to  get  just  as  much  for 
his  insured  as  he  can  and  to  secure  for  him  a  form  that  will  cover 
every  possible  emergency,  no  matter  what  his  assured   may  elect 
to  do.      XVithin  reason,  probably  such  attitude  on  the  part  of  the 
broker    is   all   right,  but   where   the    aim    is   to   overreach    in   the 
manner  that  is  evidenced  by  such  a  form  as  the  one  just  quoted,  it 
reveals  a  condition  too  unfair  and  unreasonable  to  be  recognized. 
A  condition  that   will   shortly  regulate    itself   and   will  enable  the 
broker  to  provide  his  assured   only  with  policies  of  sub-standard, 
carelessly  managed,  plunging  insurance  companies.      In  the  event 
of  loss,    also,    such   a    comprehensive,  overreaching,   unrestricted 
form  would   be  sure  to  create  dissatisfaction  and  not  unlikely  liti- 
gation, since  there  is  also  a   doubt   as   to  just   what   such   a    form 
really  does  mean. 
Held  in  Another  phrase  at   times  misused    in   defining  property   cov- 

Trust.  ered  is  that   of   '"'' held  hi  trust.'"      This   comes    in   the    lines   that 

generally  follow  a  listing  of  the  property  described  and  usually 
reads,  after  defining  such  property,  "their  own  or  held  by  them 
in  trust  or  on  commission  or  sold,  but  not  delivered."  Ex- 
pounders of  the  law  and  adjusters  find  at  times  in  this  a  case  for 
disagreement  as  to  just  what  this  phrase  really  does  mean.  It  is 
not  strange  that  this  is  so,  since  some  policy  writers  who  are 
probably  carried  away  with  the  sort  of  euphonious  legal  sound 
of  the  words  used,  incorporate  them    into  property   forms,  where 


FORMS  OF  PROPERTY  DESCRIPTION  AND  LOCATION       291 


their  use  was  not  only  never  intended  but  where  it  is  wholly  out  o£ 
place.  They  canrightfully  be  used  in  policies  of  carriers,  warehouse 
men,  commission  and  other  merchants,  to  show  that  the  assured, 
though  holding  the  property  of  others,  is  to  secure  the  full 
measure  of  insurance  upon  all  the  property  insured,  whether  the 
title  is  vested  in  him  or  not.  The  words  "held  in  trust"  simply 
mean  that  the  goods  or  the  property  are  in  the  custody  or  care  of 
the  insured.  He  may  hold  them  as  an  agent  or  in  anv  other 
capacity,  so  long  as  he  is  responsible  for  their  care  and  preserva- Held  in 
tion.  the  right  under  these  words  is  granted  to  him  to  protect  thatT'ust. 
right  by  insurance.  We  might  call  it  a  phrase  of  privilege,  since 
it  grants  a  benefit  to  the  party  holding  the  property  even  when 
the  title  to  it  is  not  in  his  own  name.  It  supersedes  the  restriction 
in  the  body  of  the  Standard  policy  as  to  the  insurable  interest 
being  that  of  sole  and  unconditional  ownership.  Were  we  dis- 
cussing it  separately  from  the  form  of  property  described  into 
which  it  is  incorporated,  we  would  say  it  was  a  permissive  clause 
relating  to  title  and  insurable  interest. 

Under  these  words  in  the  form,  the  assured  can  collect  the 
whole  amount  due  under  the  policy  and  may  return  to  the  real 
owner  the  amount  due  over  the  insurable  interest  that  he,  the 
assured,  may  have  as  agent  or  trustee.  The  real  owner,  even 
though  he  may  not  have  known  of  the  existence  of  the  insurance, 
may  rightfully  benefit  by  it  after  the  loss.  For  illustration,  let 
us  take  the  case  of  the  ordinary  commission  merchant  handling 
textile  goods.  The  mills  he  represents  deliver  their  goods  to  him 
in  advance  of  their  actual  sale  being  consummated  and  in  many 
cases  the  commission  merchant  makes  cash  advances  to  the  manu- 
facturer to  enable  him  to  continue  turning  out  his  product. 
While  these  goods  that  are  thus  being  held  as  collateral  by  the 
commission  merchant  for  these  advances,  are  in  his  custody,  it  is 
the  custom  of  trade  for  him  to  keep  them  insured,  in  fact,  he  often 
contracts  to  do  so.  They  are  held  by  him  in  trust  or  on  commis- 
sion. In  the  event  of  a  loss  occurring,  such  loss  must  be  adjusted 
with  him  and  whatever  recovery  is  made,  is  payable  to  him. 
From  the  insurance  money  received  he  can  rightfully  deduct  the 
advances  which  he  has  made  to  the  manufacturer  on  the  destroyed 
goods  and  remit  whatever  is  recovered  from  the  insurance  com- 
panies over  and  above  that  advance,  to  said  manufacturer  who  is, 
therefore,  fully  indemnified  for  the  loss  he  has  sustained.  This 
is  one  of  the  conditions  that   arise  where   due  care  must  be  taken 


292  LECTURES  ON  FIRE  INSURANCE 


to  see  that  double  insurance  is  not  effected  and  that, — to  carry  out 
the  illustration  used,  the  commission  merchant  and  the  manu- 
facturer have  not  both  of  them  taken  out  policies  of  insurance  on 
the  same  property  and  for  a  probable  aggregate  amount  in  excess 
of  its  actual  value. 
"Held  in  You  may  ask   why  we  speak   so   fully  of  the   conditions  that 

Trust."  arise   from   the  use  of   the   words,  "held    in   trust   or  on  commis- 

sion." It  is  because  of  their  frequent  misuse  in  forms  of  prop- 
erty description.  A  household  furniture  form  or  a  form  covering 
the  contents  of  a  hotel  or  a  church  or  a  school  or  of  any  other 
public  edifice  would  certainly  be  complicated  by  the  insertion  of 
these  words,  in  fact,  they  would  be  wholly  out  of  place  and 
uncalled  for,  since  the  condition  of  property  held  in  trust  or  on 
commission  should  never  occur  in  them.  To  the  carrier,  the 
warehouse  man  and  the  commission  merchant,  the  attachment  of 
such  a  form  is  necessary  in  order  to  fully  protect  the  interests  for 
which  they  are  responsible,  unless  an  endless  number  of  policies 
are  issued  to  care  for  each  individual  owner  who  may  have  goods 
in  his  custody. 

Perhaps  you  may  say,  what  harm  can  these  words  in  a  form 
do  to  any  policy,  even  if  thev  are  not  necessarv.'*  Sometimes  thev 
doubtless  would  create  no  injury,  but  at  others  their  possibilities  as 
a  trouble  maker  are  very  great.  They  admit  of  other  interests  and 
properties  being  covered,  ones  that  the  nature  of  the  insured  risk 
or  the  interests  of  its  insurers  never  contemplated.  Do  not  use 
them  then,  except  where  proper  and  necessary. 

These  are  some  of  the  practices  and  expressions  in  forms  of 
property  description  that  if  wrongly  used  may  cause  disagreement 
and  perhaps  serious  trouble,  features  that  in  form  writing  should 
be  used  most  guardedlv  and  advisedly. 

In  describing  properties  for  purposes  of  insurance,  see  to  it 
that  you  describe  just  what  is  covered,  no  more  and  no  less  and 
that  you  do  it  in  the  fewest  words  that  are  needed  to  clearly  define 
it.  Don't,  for  example,  if  you  are  writing  a  form  on  the  stock 
of  a  hardware  store,  say  "carpenters'  tools,  saws,  planes,  chisels 
and  screwdrivers,"  for  all  these  last  are  carpenters'  tools,  and  the 
multiplication  of  descriptive  words  leads  to  either  careless  read- 
ing of  the  form  or  to  the  suspicion  that  among  the  great  number 
of  w^ords  used,  something  is  included  that  should  not  be. 

Never,  oh.  never,  allow  the  word  "etc."  to  creep  into  a 
policy  form!     Did   you   ever  stop   to   think   what    a    far-reaching 


FORMS  OF  PROPERTY  DESCRIPTION  AND  LOCATION       293 


term  "etc."  is?  If  not,  ask  some  adjuster  who  has  run  across  it 
in  the  form  on  a  policy  under  which  a  claim  has  been  made,  and 
get  him  to  tell  you  what  the  assured  thought  it  covered,  since  his 
idea  is  the  one  that  eventually  will  prevail. 


Location  of  Property 

We  have  spoken  thus  far  of  forms  of  property  description  and 
have  sought  to  call  attention  to  some  of  the  things  that  good 
underwriters  must  avoid.  It  is  not  only  needful  to  have  the 
property  itself  described  properly,  but  its  location  calls  for  just 
as  clear  a  definition.  The  words  ^''zv/iile  heated  and  contained 
as  described  ivithin  and  not  etse'uhe7-e"  that  appear  in  many 
policies  are  just  as  material  to  the  contract  as  is  the  property 
itself.  With  varying  locations  the  risk  quite  likely  varies,  but 
whether  it  does  or  not,  the  insurers  surely  have  the  right  to  know^o^'iTis  of 
where  the  risk  is  that  they  are  assuming,  for  it  may  be  necessary  ^^°"* 
for  them  to  decline  an  insurance  because  they  already  have  a 
sufficient  commitment  in  that  particular  locality,  also  because 
outside  conditions  may  make  one  locality  vnidesirable,  while  the 
same  class  of  property  owned  by  the  same  assured  in  another 
locality  would  be  perfectly  acceptable. 

It  has  been  held  that  where  the  policy  says,  ^' t/ie  follow i no- 
described  property^  contained  in  a  certain  biiiJding^^''  further 
definition  of  the  location  is  not  necessary  or  material  to  the  con- 
tract, if  the  nature  of  the  property  makes  it  clear  that  it  must 
have  been  the  intention  of  the  insurer  and  insured  to  protect  it  by 
the  policy  whether  in  that  particular  place  or  not.  In  that  case 
a  designation  of  the  location  is  looked  upon  as  being  merely 
descriptive  and  to  be  controlled  by  the  necessary  use  of  the  thing 
insured.  Conditions  are  very  unusual,  however,  where  the  clearly 
defining  the  location  of  the  insured  property  is  not  fully  as 
material  to  the  contract  as  the  description  of  the  property  itself. 
In  the  New  York  form  of  policy  the  words  "and  not  elsewhere" 
are  added  to  those  describing  the  location.  These  words  are  a 
sort  of  warranty  as  to  the  location,  and  their  use  certainly  seems 
desirable,  even  though  in  the  Massachusetts  Standard  form  of  policy 
they  do  not  appear. 

The  use  of  the  word  '''' pre/nises"  sometimes  leads  to  mis- 
understandings in  the  interpretation  of  a  form.  Just  what  are 
"premises?"      The  interpretation  of  this  word    in  the    fire  policy 


294  LECTURES  ON  FIRE  INSURANCE 


seems  to  vary  somewhat  in  different  courts,  and  unless  the  extent 
of  the  so-called  '"premises"  is  in  some  way  defined  or  restricted 
in  the  policy  form,  it  appears  to  be  so  indefinite  as  to  have,  in 
some  cases,  been  interpreted  as  covering  in  localities  more  or  less 
remote  from  one  another,  but  all  forming  a  part  of  some  one 
plant.  To  define  just  what  '"premises"  are  is  a  puzzling  propo- 
sition, so  only  use  it  with  proper  limitations  or  full  and  clear 
understanding  both  on  the  part  of  the  insurer  and  of  the  insured. 

Probably  no  words  that  are  commonly  used  in  forms  of  prop- 
erty   location    have    caused    so   much    trouble    as  ^'■additions  and 
Additions        a/teratiofis''  and  '''' adjohiing  and  conuuuuicatiug.''''      They  may 
and  Altera-     seem  clear  enough,  but   it   is  a   fact   that  our  courts   have  seen   fit 
tions.  to  regard   them  as  being  sufficiently  elastic  in  their  interpretation 

to  admit  of  entirely  opposite  meanings.  The  words  '"additions 
adjoining  and  communicating"  in  a  manufacturing  plant  has  been 
held  to  cover  all  buildings  which  are  either  added  to  the  main 
building  and  that  may  be  in  any  way  necessary  for  the  complete 
operation  of  that  plant.  "Adjoining  and  communicating"  is  not 
always  held,  by  any  means,  to  require  that  the  buildings  under 
consideration  necessarily  touch  each  other.  In  fact,  the  w'ords 
"adjoininor  and  communicating,"  when  made  use  of  in  describing 
the  buildings  of  a  manufacturing  plant,  have  been  held  to  cover 
any  building  that  is  essential  to  the  conduct  and  operation  of  the 
business,  even  when  quite  remote. 

Usually  we  think  of  the  words  "adjoining  and  communica- 
ting or  connecting"  as  meaning  that  the  buildings  referred  to  are 
actually  built  into  or  attached  to  one  another.  One  of  our  New 
England  courts  held  that  a  certain  dryhouse  at  quite  a  distance 
from  the  main  plant,  but  connected  to  it  by  a  steam  pipe,  consti- 
tuted such  a  communication  as  was  contemplated  in  the  policy, 
and  certain  insurance  companies  were  compelled  to  pay  a  loss  on 
this  dryhouse  which  they  had  clearly  understood  was  not  in  any 
sense  covered  by  their  policy,  nor  included  in  the  rate.  In  fact, 
it  was  separately  and  much  more  highly  rated.  It  is  difficult  to 
give  a  general  line  of  guidance  or  instruction  in  the  use  of  these 
words,  and  the  most  that  we  can  say  is  that  before  you  use  them, 
stop  and  think  as  to  what  the  broadest  interpretation  that  might 
be  given  them  along  the  lines  which  we  have  cited,  might  cause 
the  company  to  be  called  on  to  contribute  for.  If  in  a  general 
form  covering  different  buildings  this  phrase  is  used  for  the  sake 
of   convenience    to   make    it    more    comprehensive,  and    if    it    is 


FORMS  OF  PROPERTY  DESCRIPTION  AND  LOCATION     295 


intended   not   to  cover  certain  particular   buildings,  the  exception 
of  those  particular  buildings  should  be  distinctly  noted. 

In  defining  locations  probably  the  simplest  policy  forms  and 
the  ones  most  frequently  written,  namely  those  applying  to  dwell- 
ings, present  more  instances  of  carelessness  than  any  other  class 
"East  side  of  Main  Street  in  the  town  of  So  &  So,"  is  surely  an 
indefinite  description  of  a  location,  when  Main  Street  may  be 
several  miles  long;  and  in  the  event  of  a  certain  party  owning 
several  dwellings  on  the  east  side  of  the  street,  there  is  nothing  to 
hinder  a  single  policy  paying  tribute  in  the  event  of  loss  for  any 
one  of  these  dwellings.  Descriptions  of  this  sort  are  by  no  means 
rare,  but  are  not  the  less  reprehensible. 

Another  phrase  that  is  commonly  used  in  forms  of  property 
location  presents  a  feature  of  carelessness  that  makes  one  wonder 
that  it  is  not  taken  exception  to  more  frequently  by  the  under- 
writer. I  refer  to  the  use  of  the  words  "" all tvhile  contained in.^^ 
You  know  how  many  forms  that  have  described  merchandise  or 
building  contents  of  some  sort  or  other  end  with  the  words  "all 
while  contained  in,"  and  then  proceed  to  describe  the  enclosing 
building  and  its  location.  I  think  you  will  agree  that  this  does 
not  really  limit  the  liability  of  the  company  to  the  merchandise 
or  other  property  covered  while  in  that  particular  place.  To  be 
thoroughly  safeguarded,  it  should  read,  "^oiily  xvhilc  contained 
therein  and  not  elsewhere.''^ 

Before  closing  these  comments  on  forms  of  property  descrip- 
tion and  location,  I  again  want  to  urge  upon  you  the  need  that 
there  is  for  your  always  regarding  forms  or  permits  or  clauses  as 
being  something  that  modifies  the  Standard  policy  contract,  and 
in  order  to  make  it  conform  to  some  especial  usage  of  trade  or  to 
grant  certain  privileges  that  are  essential  to  the  needs  of  some 
particular  ownership,  do  not  regard  the  whole  policy  as  being 
represented  by  the  provisions  embodied  in  the  forms  or  clauses 
attached,  but  remember  that  these  additions  are  supplementary  to 
the  policy  contract  itself,  and  while  their  provisions  must  super- 
sede those  of  the  policy  contract,  yet  they  are  dependent  upon 
same  and  they  must  never  be  considered  irrespective  of  the  Stan- 
dard provisions  in  the  body  of  the  policy. 

Where  forms  have  been  well   tried  out  and   have  been   found   Avoid  Un- 
to work    no   injustice    to    either    insurer   or    insured,  but   which   necessary 
clearly  define    just   what  the    nature   of  a  certain  risk   is  and   just   Changes. 


296  LECTURES  ON  nRE  INSURANCE 


where  it  is  located,  do  not  seek  to  continually  change  the  form 
other  than  as  it  may  be  necessary  to  describe  the  actual  property 
insured  and  the  place  in  which  it  is  insured.  In  the  general  use 
of  the  various  phrases  that  are  so  often  in  dispute,  some  of  which 
I  have  spoken  to  you  about,  stick  closely  to  the  old  prescribed 
forms  and  don't  get  the  idea  that  you  are  doing  a  brilliant  act  if 
you  invent  some  new  form  that  may  or  may  not  prove  acceptable. 
Remember,  when  you  are  inclined  to  find  fault  with  a  form  that 
has  been  in  use  a  long  time  and  has  in  the  main  proved  equitable, 
that  "  ^  tis  better  to  etidui'e  an  ill  tJianJly  to  evils  that  we  know 
not  of  r' 


III. 
FORMS  FOR  OTHER  THAN  DIRECT  FIRE  LOSS 

In  our  last  lecture  we  confined  our  attention  to  fire  insurance 
forms  of  property  description  and  location.  You  will  also  recall 
that  in  beginning;  this  course  of  talks  we  defined  forms  as  those 
attachments  to  the  policy  which  were  descriptive  in  their  nature, 
and  we  mentioned  the  fact  that  forms  not  only  described  the  prop- 
erty covered  and  the  place  in  which  it  was  located,  but  they  might 
also  define  the  nature  of  the  insurance  carried  in  the  event  of  its 
being  other  than  against  direct  loss  or  damage  from  fire. 

We  defined  attachments  of  this  sort  as  being  "  forms  for  other   Use  and  Oc- 

than  fire  liability,"  such   as  Use  and  Occupancy,  Rent,  Leasehold   cupancy, 

Interest,  Profit  insurance,  etc.      It  is  our  purpose  to-ni^-ht  to  briny-      ^^  *    ^^^^' 
/     .  ,   ,  .  ^     ^  r  ,    ,       hold  Interest 

forms  for  msurance  contracts  of  this  tvpe  to  your  attention,  and  the        ,  p    ,■. 

subject  is  one  that  we  approach  with  fear  and  trembling.  I  recall  Insurance, 
some  10  or  15  years  ago,  at  an  Insurance  ban([uet,  that  an  address 
was  given  by  one  of  the  oldest  and  most  experienced  Fire  Insurance 
Company  Presidents  then  in  acti\  e  business.  In  the  course  of  his 
address  he  stated  that  he  had  been  recently  asked  as  to  who  under- 
stood Use  and  Occupancv  Insurance.  His  replv  was  that  he 
belie\  cd  that  a  few  Special  Agents  knew  something  about  it,  but  not 
a  single  head  office  official  !  I  am  fully  justified  in  believing  that  at 
that  time  I  was  not  one  of  the  Special  Agents  referred  to,  and  with 
the  increasing  complications  and  perplexities  that  insurance  con- 
tracts of  this  sort  present,  I  begin  to  wonder  whether  I  do  not,  after 
all,  really  know  less  about  insurance  of  this  class  now  than  then. 
So  you  can  see  that  insin^ance  of  these  varied  forms,  presenting  as 
it  does  problems  vastly  different  from  those  embodied  in  the  direct 
fire  loss  contract,  and  also  considering  that  up  to  date  the  experi- 
ence of  the  companies  writing  this  class  of  insurance  is  a  somewhat 
limited  one,  naturally  causes  statements  made  in  regard  to  it  to  be 
uttered  with  more  or  less  hesitation. 

We  have,  howe\er,  gone  far  enough  with  it  to  know  that  there 
are  certain  conditions  that  must  be  carefully  avoided,  and  it  is  my 


298 


LECTURES  ON  FIRE  INSURANCE 


hope  that  in  this  discussion  to-ni^ht  your  attention  may  be  called  to 
them,  and  that,  if  we  accomplish  nothing  more,  you  will  be  brought 
into  an  attitude  of  mind  that  will  cause  you  to  think  carefully  of 
these  varied  forms  (jf  insurance  whene^■er  you  have  occasion  to 
study  or  devise  them,  and  will  be  able  at  least  to  a\oid  some  of  the 
common  errors  that  so  easily  creep  in. 
Use  and  The  most   common  of  the  forms  we  have  mentioned  is  that  of 

Occupancy  "Use  and  Occupancy."  Now,  what  is  Use  and  Occupancy  insur- 
Insurance.  ance  ?  Just  what  does  this  title,  "Use  and  Occupancy,"  really 
mean?  Many  circulars  have  been  issued  defining  it,  and  while  in 
the  main  they  agree,  still  a  recent  experience  of  my  own  with 
parties  taking  out  contracts  of  this  character  and  who  had  sought 
ad\  ice  through  \ari(nis  sources,  revealed  the  fact  that  it  is  ^■ery  easy 
for  the  insurance  man,  in  seeking  to  define  and  explain  just  what  a 
Use  and  Occupancy  contract  covers,  to  unintentionally  mislead  his 
customers. 

The  natural  tendency  with  any  man  in  explaining  a  somewhat 
complicated  contract  of  this  sort,  is  to  magnify  its  efficiency  and 
with  thoroughly  good  intentions,  and  usually  with  great  largeness 
of  heart,  to  make  it  appear  to  cover  many  things  that  the  under- 
writer never  contemplated  insuring  against. 

Let  us,  from  the  combined  wisdom  of  those  who  have  written 
on  this  subject,  and  the  experience  of  others,  try  and  give  a  con- 
densed statement  of  the  province  of  Use  and  Occupancy  insurance. 
Some  state  that  its  object  is  to  make  good  the  loss  of  "profits" 
that  are  consequent  upon  the  shutting  down  of  a  manufacturing 
plant  by  fire.  Others  state  that  while  it  is  not  primarily  designed 
to  insure  profits  as  such,  it  is  to  insure  the  results  of  production  in 
the  sense  that  product  is  regarded  as  income  from  process  of  opera- 
tion. 

In  the  event  of  a  shut-down  as  the  result  of  a  fire,  this  product 
and  income  therefrom  ceases,  while,  at  the  same  time,  there  are 
always  certain  fixed  charges  and  expenditures  which  have  to  be 
kept  up  in  order  to  maintain  the  organization  in  such  a  condition  as 
to  not  only  hurry  forward  the  needfid  repairs  and  re-instatement  of 
the  damaged  plant,  but  also  to  place  the  same  on  an  operating  basis 
as  soon  after  its  completion  as  possible.  For  illustration,  interest 
on  indebtedness  that  the  concern  may  ha\e  outstanding  continues 
to  work  whether  the  plant  runs  or  not ;  taxes  are  seldom  materially 
abated  as  a  consequence  of  a  fire  ;  royalties  for  special  machinery 
usually  continue  in  force  :  salaries  of  those  who  are  under  term  con- 


FORMS  FOR  OTHER  THAN  DIRECT  FIRE  LOSS  299 


tracts  with  the  concern  ;  the  wages  of  watchmen,  firemen,  engineers, 
costs  of  Hghting  and  heating,  and,  in  fact,  you  can  readily  think  of 
numerous  other  fixed  charges  which,  if  it  is  the  purpose  of  the 
assured  to  restore  his  plant  and  continue  in  business  as  promptly  as 
possible,  must  be  continued  in  order  to  enable  him  to  resume  a  con-  Use  and 
dition  of  satisfactory  productiveness  at  as  early  a  day  as  possible.  Occupancy. 
Meantime,  through  the  intervention  of  fire,  the  income — the  funds 
coming  in  from  the  business  that  are  looked  to  care  for  these  fixed 
charges — has  ceased. 

It  seems  to  me,  then,  that  those  who  define  Use  and  Occupancy 
insurance  as  covering  profits  even  in  the  remote  sense  that  some 
writers  use  the  term,  rather  misuse  the  word  and  are  likely  to  mis- 
lead. It  is  a  continuance  of  product,  it  seems  to  me,  that  Use  and 
Occupancy  insurance  guarantees,  in  the  sense  that  when  a  plant  is 
producing  goods  or  when  business  acti\ities  of  any  kind  are  being 
conducted  within  its  confines,  whether  manufacturing  or  not,  there 
is  a  result  obtained  that  brings  in  through  the  disposition  of  that 
product,  an  income  to  meet  the  expenditures  connected  with  manu- 
facturing whether  they  result  in  a  profit  or  not.  Do  not  think  from 
this  that  I  would  consider  a  plant  that  was  running  without  making 
a  profit  as  a  desirable  subject  for  a  Use  and  Occupancy  policy,  but 
even  assuming  that  it  was  operating  on  a  highly  profitable  basis,  the 
Use  and  Occupancy  contract  is  not  designed  to  make  good  the 
loss  of  that  profit  which  would  result  from  a  fire  and  a  termina- 
tion of  the  processes  of  manufacture  or  trading  and  the  consequent 
gain  resulting  from  them. 

There  are  many  losses  that  result  from  the  shut-down  of  a  plant 
or  store  during  its  periods  of  activity,  even  aside  from  those  that  we 
have  spoken  of,  and  the  money  derived  from  the  insurance  carried 
under  the  Use  and  Occupancy  form  has  been  found  again  and  again 
to  be  the  only  available  fund  which  could  be  used  to  lessen  the 
period  of  inactivity  or  to  carry  on  the  business  temporarily  while 
the  rehabilitation  of  the  destroyed  plant  was  being  carried  on.  This 
latter  view  of  the  situation  is  tenable,  when  we  consider  that  under 
a  Use  and  Occupancy  policy  the  sum  of  money  paid  over  to  the 
assured  has  ofttimes  enabled  him  to  either  engage  temporary  quar- 
ters or  to  lease  some  other  plant  and  in  that  way  to  continue  to 
supply  his  customers  and  hold  his  business  during  the  same  period 
that  his  fire  policies  are  rebuilding,  re-equipping  and  re-stocking 
the  destroyed  plant. 

One  of  the  first  questions  that  presents  itself  to  the  underwriter, 


300  LECTURES  ON  FIRE  INSURANCE 

and  one  that  should  be  carefully  considered  by  the  assured  as  well, 
is  as  to  who  are  wisely  eligible  for  policies  of  this  sort  and  for  what 
amount  may  they  be  written.  As  a  general  principle,  it  may  be 
stated  that  only  concerns  of  unquestioned  standing  and  accounting 
methods  should  ever  be  considered  in  writing  insurance  of  this  sort. 
Some  companies  go  even  farther  than  this,  and  in  order  to  render 
the  liklihood  of  a  total  loss  under  a  Use  and  Occupancy  policy  as 
remote  a  thing  as  possible,  confine  their  writings  strictly  to  sprink- 
lered  risks.  This  latter  point  is,  of  course,  wholly  discretionary, 
with  the  underwriting  company,  but  the  first  feature  mentioned 
that  of  high  standing  and  efficient  bookkeeping,  should  be  always 
required  of  those  seeking  insurance  of  this  character. 
Use  and  I  t^o  not  know  that  there  is  any  rule  adhered  to  by  the  insur- 

Occupancy.  ance  companies  as  to  the  proper  amount  of  a  Use  and  Occupancv 
policy  with  reference  to  either  value  of  the  property  or  the  amount 
of  business  transacted  by  the  Assured.  Some  have  adopted  a  form 
calling  for  90%  of  the  net  income;  this  would  appear  to  introduce 
the  profit  feature,  and,  in  any  event,  to  raise  a  doubt  as  to  just 
what  "  net  "  income  was.  As  a  general  proposition  1  believe  that 
about  10%  of  the  annual  business  of  a  concern  is  a  reasonably  fair 
average  line  of  Use  and  Occupancy  to  carry,  and  experience  would 
seem  to  bear  out  this,  since  the  average  amounts  carried  run  not  far 
from  that  percentage.  Let  us  take  the  case  of  a  certain  concern 
that  comes  to  my  mind  at  this  moment ;  its  plant  is  valueil  at  about 
$400,000.  They  are  carrying  fire  policies  to  the  extent  of  90%  of 
that  value.  The  annual  business  averages  a  million  a  year.  After 
careful  consideration,  both  underwriter  and  assured  agree  that 
$100,000  Use  and  Occupancy  was  just  about  the  right  amount  to 
carrv. 

Conditions  of  construction,  the  nature  of  the  business,  the  fre- 
quency with  which  the  stock  is  turned,  the  protective  de\ices  in  use 
on  the  property,  all  have  their  bearing  on  both  the  desirability  and 
the  amount  of  the  Use  and  Occupancy  policv,  and  the  rate  at  which 
it  should  be  written,  and  as  experience  grows  riper,  in  dealing  with 
contracts  of  this  sort,  doubtless  more  definite  rules  will  be  formu- 
lated for  the  guidance  of  the  agent  and  the  broker  seeking  Use  and 
Occupancy  contracts,  luit  at  present  we  are  largelv  feeling  our  wav 
in  the  dark,  though  experience  has  proved  that  the  enterprise  thus 
far  not  only  has  been  a  reasonably  profitable  one,  but  also  promises 
well  for  the  future. 

Cases  often   arise   in   manufacturing   jilants  where   a    Use  and 


FORMS  FOR  OTHER  THAN  DIRECT  FIRE  LOSS  301 

Occupancy  contract  may  rightfully  be  drafted  to  cover  cjther  than 
the  manufacturing  or  producing  buildings.  Storehouses  that  con- 
tain the  product  either  in  an  incomplete  or  a  finished  state,  may 
properly  be  covered,  since  their  destruction  or  the  loss  or  injury  of  Use  and 
their  contents  will  just  as  effectively  shut  off  the  output  of  the  mills  Occupancy. 
as  a  fire  in  the  producing  portions.  A  lumber  yard  directly  con- 
nected with  a  plant  using  wood  as  one  of  its  raw  materials  may  be 
included,  if  desired,  in  the  same  way  that  a  storehouse  might. 

In  the  case  of  a  mercantile  business,  the  store  where  the  actual 
business  of  distributing  is  conducted  or  the  storehouses  on  ^vhich 
such  store  depends  for  its  immediate  needs  are  also  fit  subjects. 

As  to  the  cjuestion  of  rate,  at  present,  as  you  know,  fixed  tariff 
rates  are  not  promulgated  on  insurance  of  this  class.  They  are 
purely  discretionary  with  the  underwriter.  Investigation  reveals 
that  they  run  from  ^  to  ^  of  the  regular  fire  rate.  In  occasional 
cases,  they  fully  equal  the  latter,  but  we  probably  are  not  far  out 
when  we  say  that  the  great  bulk  of  Use  and  Occupancy  insurance 
written  to-day,  here  in  the  east,  is  written  at  about  2j  of  the  fire 
rate.  Whatever  the  rate  is,  it  must  be  modified  largely  by  the  con- 
ditions that  exist  in  the  plant,  not  only  the  liklihood  of  a  loss,  but 
the  ability  to  confine  that  loss  within  small  limits  and  also  such  ar- 
rangement in  the  plant  as  makes  it  probable  that  a  fire  will  result 
in  but  a  temporary  shutdo\vn  at  the  most. 

Use  and  Occupancy  policies  are  written  not  onl}-  with  a  limita- 
tion as  to  the  maximum  amount  payalile  thereunder,  but  w'ith  a 
stipulated  per  diem  contribution  which  shall  continue  during  the 
period  of  shutdown  in  the  event  of  a  loss  occurring.  This  feature 
of  the  Use  and  Occupancy  contract  is  one  that  probably  has  created 
more  discussion  lietween  insurer  and  insured  than  any  other  in  the 
Use  and  Occupancy  policy.  For  example,  suppose  a  man  takes 
out  a  Use  and  Occupancy  policy  of  $3,000  on  his  factory.  We 
always  assume  that  there  are  300  working  days  in  a  year  and  that, 
therefore,  $10  a  day  for  each  working  day  would  exhaust  the  pol- 
icy in  cjuestion.  But  the  Assured  will  say,  "  at  the  most,  I  can't 
be  shut  down  over  four  months.  Why  then  shouldn't  I  get  instead 
of  $10  or  that  is  1-300  of  my  policy  per  day,  l-lOO,  since  there  are 
about  100  working  days  in  four  months.  In  other  words,  why 
shouldn't  my  contract  give  me  $30  instead  of  $10  a  day  during  the 
period  I  am  shut  down?"  A  contract  drawn  in  this  way  and 
granting  this  more  liberal  per  diem  contribution,  would  certainly 
be  a  valid  one  if   an   insurance  company   sa^v  fit   to   grant  it,  but  it 


302  LECTURES  ON  FIRE  INSURANCE 


would  ])v  unjust  to  ask  any  company,  unless  they  were  to  receive  a 
very  materially  higher  rate,  to  accept  such  a  contract  for  a  year. 
Suppose  the  assured  chose,  in  the  illustration  used,  to  take  out  his 
policy  for  four  months  and  paid  a  rate  accordingly,  because  he 
would  probably  say,  "  I  can  have  my  plant  going  again  under  any 
conditions  in  that  period  and  1  don't  need  a  Use  and  Occupancy 
policv  for  a  longer  term  than  that."  Such  an  arrangement,  if  a 
company  saw  fit  to  grant  it,  would  be  all  right,  but  they  certainly 
should  be  paid  a  very  materially  higher  rate.  You  will  all  admit, 
I  am  sure,  that  to  take  such  a  contract  for  a  year  with  the  liklihood 
that  cessation  for  a  small  part  of  that  vear  might  completely  exhaust 
the  policy,  is  an  underwriting  proposition  that  cannot  commend  it- 
self to  any  careful  Insurer. 
Use  and  Other  features   must  be  considered  in  discussing  Use  and  Oc- 

Occupancy.  cupancy  insurance,  and  these  are  especially  pro^•ided  for  in  many 
of  the  Use  and  Occupancy  forms  by  stating  the  method  that  shall 
be  adopted  in  determining  the  actual  effect  on  the  business  owing 
to  a  cessation  of  working  power.  A  good  illustration  of  this  is  the 
case  of  Use  and  Occupancy  insurance  that  is  written  on  Street  Rail- 
way properties  where  the  income  varies  very  materially  between 
the  summer  and  the  winter  months.  In  properties  of  this  sort,  it  is 
customary  when  taking  out  Use  and  Occupancy  insurance  to  specify 
in  the  form  that  as  a  basis  for  the  computation  of  daily  income, 
there  shall  be  taken  that  of  the  corresponding  period  of  the  pre\ious 
year.  Suppose  that  owing  to  a  fire  in  its  power  plant,  for  example, 
a  certain  Street  Railway  was  unable  to  operate  its  cars  during  the 
entire  month  of  July,  July  averaging  probably  as  one  of  the  heavi- 
est months  in  the  annual  business  of  the  road.  Now,  it  would  not 
be  fair  to  take  the  average  monthly  Inisiness  for  the  entire  year  as 
being  the  loss  sustained,  and,  therefore,  a  form  such  as  the  one  we 
are  speaking  of  would  require  the  determination  (which  could  be 
readily  shown  from  the  books  of  the  assured)  of  the  lousiness  of  the 
preceding  July,  which  would  be  taken  as  a  basis  for  the  amount 
and  damage  to  its  business  sustained  by  the  road  and  would  furnish 
data  from  which  to  figure  out  the  contribution  by  the  Use  and  Oc- 
cupancy policies. 

Some  Use  and  Occupancy  forms,  in  addition  to  the  pro\  ision 
just  described,  insert  one  stating  that  increased  or  decreased  daily 
or  monthly  production,  owing  to  a  growing  or  a  falling  off  business 
condition,  may  also  be  consideretl  in  arri\  ing  at  the  actual  loss  of 
output. 


FORMS  FOR  OTHER  THAN  DIRECT  HRE  LOSS  303 

Some  lines  of  husiness,  owing  to  trade  or  climatic  conditions, 
shut  down  entirely  for  certain  months  in  the  year  and  the  same 
treatment  is  necessary  to  equitably  adjust  their  loss  that  is  used  in 
the  vStreet  Railway  illustration  we  have  cited. 

The  general  experience  of  companies  writing  Use  and  Occu-  Use  and 
pancy  insurance  indicates  that  it  can  safely  be  written  at  figures  re-  Occupancy, 
lated  to  the  fire  rates  in  the  proportion  we  ha\  e  mentioned.  This, 
however,  we  must  confess,  is  still  very  largelv  a  matter  of  conjec- 
ture, since  loss  costs  and  averages  are  very  difficult  of  determina- 
tion in  insurance  of  this  class  and  have  not  as  yet  been  derived  from 
a  sufficiently  wide  experience  to  really  make  them  of  established 
value.  I  want  to  emphasize  again  the  great  importance  of  careful 
consideration  of  the  individual  premises  and  the  financial  condition 
and  accounting  methods  of  its  owners  that  are  insured  under  any 
Use  and  Occupancy  policy.  Is  the  plant  one  that  uses  standard 
machinery  and  devices  that  are  readily  obtainable,  or  is  it  one  that 
is  wholly  dependent  on  the  output  of  some  patented  devices  that 
are  slow  of  construction  and  that  are  only  built  when  definitely  re- 
quired ?  Conditions  like  these  make  all  the  difference  between  a 
short  shut-down  and  rapid  replacement  or  a  long  and  tedious  wait. 
The  same  conditions  applv  to  the  building  to  be  replaced.  Is  it  a 
frame  structure  that  can  quicklv  be  rebuilt,  and  that  has  not  special 
features  in  its  arrangement,  or  is  it  a  brewery,  for  example,  that 
necessitates  slow  building  methods  and  special  arrangements  adapted 
to  its  processes?  Are  the  assured's  books  well  and  clearlv  kept,  and 
can  product  and  income  be  readily  and  accuratelv  determined? 

In  an  industry  that  is  dependent  upon  large  power  for  its  op- 
eration, is  the  power  plant  so  built  and  arranged  that  it  could  be 
easllv  crippled  and  shut  down  the  entire  premises?  Still  further, 
is  the  nature  of  the  power  used,  and  the  way  it  is  used,  such  that  it 
would  be  easv  or  difficult  to  install  and  connect  temporary  engines 
or  motors  in  order  to  get  the  plant  under  way  ?  All  such  points 
must  be  taken  into  account  bv  the  careful  underwriter  in  consider- 
ing not  only  the  desirability  of  Use  and  Occupancy  Insurance,  but 
the  rate  at  which  it  may  be  written.  In  this  connection  let  us  sav 
that  it  is  to  be  hoped  that  the  time  is  not  far  distant  when  there  will 
be  more  data  on  file  that  will  show  the  actual  results.  At  present 
rates,  insurance  of  this  class  appears  to  be  fairly  profitable,  both  as 
to  the  ratio  which  the  losses  bear  to  the  premiums  received,  and 
that  more  important  item,  loss  cost,  which  is  the  ratio  of  the  loss 
sustained  to  the  total  amount  insured. 


304  LECTURES  ON  FIRE  INSURANCE 

Before  giving  illustrations  of  some  of  the  forms  of  Use  and 
Occupancy  insurance  that  are  desirable  and  some  that  are  bad,  I 
want  to  take  up  briefly  these  other  clauses  that  are,  in  a  certain 
way,  insurance  of  the  same  sort,  such  as  rent,  leasehold  interest, 
and  proflt.  It  seems  better  to  speak  of  these  before  passing  on  to 
Use  and  Occupancy  forms,  since  there  is  a  tendency,  as  already 
stated,  in  the  minds  of  many  to  mix  the  functions  of  Use  and  Oc- 
cupancy insurance  ^yith  one  or  more  of  these  other  classes,  accord- 
ing to  the  nature  of  the  risk  insuretl. 
Rent  Rent  insurance,  although  of  rather  recent  origin,   has  grown 

Insurance.  ,-q  considerable  magnitude  and  is  being  regarded  with  more  and 
more  fa\or,  both  by  the  Insurance  Companies  and  their  patrons. 
When  it  is  properly  written,  it  proves  both  equitable  and  fairly  re- 
munerative. The  reasons  for  this  are  that  properties  that  are  con- 
sidered fit  subjects  for  insurance  of  this  character,  and  to  which  its 
operations  have  thus  far  been  confined,  are  almost  in\ariably  under 
both  police  and  fire  department  protection,  and,  what  is  more  im- 
portant, property  that  is  eligible  for  rent  insurance  presents  a  greater 
freedom  from  moral  hazard.  The  reason  for  this  is  that  rented 
properties  are  usually  under  the  control  as  well  as  the  occupancy  of 
tenants  and  are  not  freely  accessiljle  to  those  who  might  directly 
benefit  by  a  fire.  Again,  the  measure  of  damage  resulting  from  a 
loss  under  a  contract  of  this  character  is  very  easily  ascertained, 
and  owing  to  this  a  better  salvage  is  often  secured  than  results 
from  a  loss  on  either  buildings  or  on  other  property. 

There  are  many  different  forms  under  which  Rent  insurance 
is  written,  forms  of  varying  length,  some  clear,  some  ambiguous, 
and  the  tendency  appears  to  be  on  the  part  of  some  brokers  special- 
izing on  insurance  of  this  sort,  to  continually  broaden  the  contract 
in  order  to  make  it  more  attractiye  and  thereby  secure  the  placing 
of  more  insurance  of  this  character  for  themsehes.  Both  experi- 
ence and  litigation  have  had  a  good  effect  on  the  drafting  of  Rent 
insurance  forms.  Whatever  form  is  used,  the  same  obligation  that 
we  spoke  of  under  forms  of  property  description  should  always  be 
kept  in  mind.  The  intent  of  the  parties  should  be  clear,  and  it 
should  be  defined  beyond  a  doubt  that  the  policy  is  to  cover  on  the 
rents  derived  from  the  building  at  the  time  of  the  fire.  To  insure 
this  recjuires  co-insurance  to  the  extent  of  the  actual  rental,  but  it 
should  not  cover  the  income  that  might  be  deri\  ed  from  properties 
unrented  at  the  time  of  the  fire.  We  call  your  attention  especially 
to  this  because  there  is  a  tendency  on  the  part  of  some  form  drafters 


FORMS  FOR  OTHER  THAN  DIRECT  FIRE  LOSS  305 

to  make  a  Rent  form  co\er  not  only  the  actual  rents  that  are  lost  by 
the  fire,  but  to  use  the  phrase  "  rental  ^•alue,"  basing  the  income 
thereby  on  the  total  rent  that  would  be  obtained  were  the  entire  Rent 
property  rented.  You  can  readily  see  that  with  such  a  form,  old,  Insurance. 
undesirable  and  unpopular  buildings  might  recei\e,  through  Rent 
insurance,  a  far  greater  sum  than  the  actual  loss  of  rents  which  the 
owners  had  sustained  from  a  fire. 

A  form  that  it  seems  to  me  covers  all  that  a  Rent  form  should, 
might  be  worded  as  follows  :  — 

"It  is  imderstood  and  agreed  that  in  case  above  named 
building  or  any  part  thereof  shall  be  rendered  untenantable 
by  fn-e,  this  company  shall  be  liable  to  the  assured  for  the 
actual  loss  of  rents  ensuing  therefrom,  based  on  the  rentals  in 
force  from  the  rented  portion  of  the  premises  at  the  time  of  the 
fire  and  not  exceeding  the  sum  insured. 

Loss  to  be  computed  from  the  day  of  the  fire  for  the  time 
it  would  require  to  put  the  premises  in  tenantable  condition, 
and  not  to  be  limited  by  the  expiration  of  the  policy,  excluding 
from  such  time  such  portion  thereof  as  may  be  consumed  by  a 
strike  or  by  anv  other  delay  beyond  the  control  of  the  insured. 

In  consideration  of  the  reduced  rate  at  which  this 
policv  is  issued,  the  insured  stipulates  and  agrees  to  carry 
insurance  on  said  rents  to  an  amount  equal  to  the  actual  rents 
of  said  premises,  and  it  is  understood  and  agreed  that  if  at  the 
time  of  the  fire  the  aggregate  insurance  upon  said  rents  shall 
be  less  than  the  actual  rentals  at  the  time  of  the  fire,  the 
insured  shall  be  held  to  be  an  insurer  in  the  amount  of  such 
deficiency,  and  in  that  event  shall  bear  such  proportionate 
share  of  the  loss." 

You  will  note  from  this  that  while  the  object  of  rent  insurance 
is  to  indemnify  a  landlord  for  the  loss  of  income  that  would 
come  to  him  through  a  fire,  and  is  in  a  general  way  insurance  of 
the  same  class  as  Use  and  Occupancv,  still  there  is  a  wide  difference 
in  that  the  rents  lost  are  definitely  ascertainable,  while  with  Use  and 
Occupancv  there  is  alwavs  an  element  of  uncertainty  as  to  just  the  ex- 
tent of  the  damage  and  the  necessary  contribution  therefor  on  the 
part  of  the  Insurance  Companies. 

You  will  furthermore  note  that  while  rent  insurance,  if 
properly  written,  should  alwavs  be  accompanied  by  a  clause  fixing 
the  amount  of  insurance  to  be  carried  with  respect  to  total  income 
or  business,  a  Use  and  Occupancv  policy  could  not  properlv  be  sub- 
ject to  such  a  restriction. 

Leasehold  Interest  Insurance  covers  more  \aried  interests  than 
are  involved  in  rent  insurance.  It  necessarily,  therefore,  becomes 
more  complicated. 


306 


LECTURES  ON  FIRE  INSURANCE 


Leasehold 
Interest  In- 
surance. 


Leasehold  interest  not  only  insures  the  middleman  or  lessee, 
but  it  also  insures  the  profit  between  what  he  would  pay  the  owner 
of  the  property  and  what  he  may  receive  from  tenants  to  whom  he 
sub-lets  the  same.  Again,  it  may  insure  his  interest  as  lessee,  and 
yet  again,  it  may  insure  his  interest  in  a  building  which  he  may 
erect  on  leased  ground.  The  fact  that  such  a  variety  of  interests 
ma}-  he  brought  forward  under  a  Leasehold  interest  policy  neces- 
sarily raises  many  features,  and  some  of  the  objectionable  ones  are 
the  following. 

Contracts  often  exist  between  the  landlord,  that  is  the  real 
owner  of  the  property,  and  the  lessee  which  are  not  divulged  by  the 
policy  and  the  provisions  of  which  the  insurer,  and  even  the  broker 
placing  the  line,  may  be  in  absolute  ignorance  of  it.  ThisdifHculty 
might  be  overcome  by  the  use  of  a  proper  form,  Init  it  is  a  fact  that 
it  has  frequently  been  the  subject  of  tedious  and  more  or  less 
expensive  litigation.  Many  leasehold  forms  of  attachment  to 
insurance  policies  contain  a  clause  like  this  : — 

"It  is  a  conditon  of  this  insurance  that  this  company  is 
liable  only  in  case  of  such  destruction  by  fire  of  the  above 
named  premises,  that  the  lease  held  by  the  insured  shall  by 
its  terms  be  cancelled.  The  company  then  shall  be  liable  to 
pay  the  amount  hereby  insured." 

This,  you  will  note,  refers  to  a  contract  that  is  not  set  out  in 
the  policy,  which  often  presents  objectionalile  and  dangerous 
features  for  the  Insurance  Company. 

In  some  cases  the  following  phrase  is  used  : — 

"In  case  of  the  destruction  of  the  premises  by  fire,  this 
lease  shall  cease  and  be  terminated." 

Under  this  clause,  if  the  term  of  the  lease  would  not  expire 
for,  say,  three  years  and  the  building  should  be  replaced  in 
tenantable  condition  in  four  months,  the  lessee  could  collect  from 
the  insurance  company  for  three  years  rent,  if  he  had  insurance 
amounting  to  as  much  as  that,  wholly  regardless  of  the  time  that  it 
actually  takes  to  replace  the  damaged  property.  The  courts  are 
having  continually  presented  to  them  for  adjudication  features  that 
were  never  contemplated  by  either  parties  to  the  contract  before  the 
fire,  but  which  have  arisen  at  the  instigation  of  some  attorney  brought 
into  the  settlement  of  the  loss  claim.  It  is  difiicult  to  draft  a  lease- 
hold form  which  will  cover  all  cases,  and  the  only  suggestion  that 
can  be  made  is  that  forms  used  in  Leasehold  interest  insurance 
should  be  prepared  with  great  care  and  should  always  be  regarded 
from  the  standpoint  of  an  occurred  loss  thereunder. 


FORMS  FOR  OTHER  THAN  DIRECT  FIRE  LOSS  307 

Another  and  most  important  feature  of  leasehold  interest,  and 
one  that  calls  for  the  closest  of  scrutiny  on  the  part  of  the  underwriter 
is  that  insurance  of  this  character  is  very  easily  and  not  infrequently 
tainted  with  moral  hazard,  especially  if  the  lessee  desires  to  rid 
himself  of  a  bad  bargain.  The  possibilities  of  making  money 
fraudulently  out  of  an  opportune  fire  under  a  policy  of  this  kind, 
where  premises  leased  did  not  sub-let  to  advantage,  are  very  fertile 
ones. 

Profit  Insurance  is  comparati\ely  new  and  it  presents  features  Profit  Insur- 
that  a  good  many  companies  object  to  and  many  absolutely  ance. 
prohibit.  A  Profit  insurance  policy  is  a  dangerous  instrument  to 
put  into  the  hands  of  an}-  but  the  most  reputable  and  reasonable  of 
Assuretl.  In  itself  it  creates  at  once  a  moral  hazard  which,  while 
it  may  not  be  recognized  as  such  b}-  the  honest  manufacturer  or 
merchant,  still  does  exist,  and  to  those  in  the  business  whose  virtue 
is  of  a  less  rugged  type,  it  presents  a  constant  temptation  to  make 
sure  of  a  greater  profit  than  the  conditions  of  the  business  warrant. 
It  matters  not  what  the  nature  of  the  business  is,  similar  conditions 
exist  under  insurance  of  this  form.  The  fire  insurance  policy  which 
the  Assured  carries  will  make  good  to  him  the  loss  of  the  plant 
which  he  is  operating,  as  well  as  of  its  contents  of  e\ery  character, 
and  if  we  adtl  to  that  the  assurance  that  the  profit  on  all  of  his 
unsold  merchandise  will  immediately  become  his  in  the  event  of  a 
fire,  we  must  admit  that  the  temptation  placed  before  the  manufac- 
turer or  merchant,  in  times  of  slow  business  and  poor  trade,  is  one 
that  weak  humanity  is  sorely  tempted  to  a\ail  itself  of.  Many 
people  would  view  with  comparative  et[uanimity  the  destruction  of 
their  property,  pro\ided  it  is  well  protected  by  a  fire  insurance 
policy,  but  they  might  be  sorely  disturbed  if  at  the  same  time  the 
profit  which  they  had  expected  to  receive  from  merchandise  in  their 
hands  was  taken  awav  from  them,  antl  at  this  point  profit  insurance 
steps  in  and  virtually  says,  "■  Why  lose  anything?  Why  not  regain 
your  lost  plant,  and  in  addition  all  of  the  benefit  that  would  have 
come  to  you  from  the  conduct  of  a  profitable  business  ?"  Still 
further  is  the  increase  of  hazard  created  where  slow  moving  stocks, 
old  styles  of  merchandise  and  seemingly  unsalable  articles  form  a 
large  portion  of  the  assets  of  the  business. 

Profit  insurance,  therefore,  can  only  be  written  with  safety  by 
confining  it  to  successful,  li^e  concerns  of  established  and  financial 
worth,  and  even  then  it  would  not  appear  amiss  to  incorporate  a 
clause  in  the  policy  and  specify  that  in  the  e\ent  of  any  loss  a  fixed 


308  LECTURES  ON  FIRE  INSURANCE 


percentaj^e  of  the  profits  should  be  the  limit  of  the  claim  to  be  made 
under  the  insurance,  much  in  the  same  manner  that  the  Three- 
quarter  Value  clause  is  applied  in  writing  certain  properties.  In 
addition  to  this  there  should  be  an  adequate  co-insurance  clause 
attached  which  should  definitely  fix  the  relation  between  the 
amount  of  insurance  carried  and  the  total  profits  derixed  from  the 
business  for  the  period  of  the  insurance.  Under  any  conditions, 
insurance  of  this  character  should  ne\er  be  written  for  concerns  or 
indi\iduals  whose  system  of  bookkeeping  is  not  of  such  a  definite 
character  as  to  show  clearly  the  business  conditions,  especially  as 
regards  the  profits  made. 
The  Danger  So   much  in  a  general  way  for  these  four  kinds  of  insurance 

of  Confusion,  that  are  closely  allied  to  the  direct  fire  lines.  To  me  it  seems  as  if 
one  of  the  dangers  attendant  on  writing  these  classes  of  other  than 
fire  insurance  was  a  tendency  to  mix  their  various  functions  and  one 
or  two  illustrations  may  serve  to  bring  that  condition  more  clearly 
to  your  minds.  I  have  before  me  a  Use  and  Occupancy  and  ''  Ex- 
pense "  form  issued  by  one  of  our  best  known  and  most  successful 
companies,  which  reads  in  part  : — 

Some  Irregu-  '*$•    •    •    On    the    Use    and    Occupancy    of   building   and 

lar  Forms.  machinery  of   .    .    .   situate   .    .    .   and  occupied.    ...      If   the 

said  building  and  its  machinery  equipment  be  destroyed  or  so 
damaged  by  fire  as  to  necessitate  the  total  or  partial  suspension 
of  operations,  this  Company  shall  be  liable  under  this  policy 
for  loss  of  net  profits  on  goods,  the  production  of  which  is 
thereby  prexented." 

The  feature  of  this  form  to  which  I  want  to  call  particular 
attention  is  in  the  abo\e  use  of  the  words  ''  )iet  profits  on  goods" 
for  there  is  no  qualifying  clause  in  the  remainder  of  the  form  that 
indicates  that  tlie  use  of  the  word  '*  profits"  is  other  than  the  ordi- 
nary understanding  of  that  word.  If  the  Insurer  and  the  Insured 
know  exactly  what  this  form  means  and  are  willing  to  accept  it, 
there  would  seem  to  lie  no  objection  to  its  use,  but  I  fail  to  see  how 
it  can  rightfully  be  termed  a  Use  and  Occupancy  contract. 

Another  somewhat  puzzling  and  \  ague  form  that  we  run  across 
occasionally  masquerading  as  a  Use  and  Occupancy  contract,  is 
that  which  is  especially  designed  to  co\er  goods  that  are  exhilnteil 
at  some  exposition  or  fair.  I  ha\e  before  me  one  that  is  designed 
to  protect  the  exhibitor  for  one  week,  that  is,  a  period  of  six  exhi- 
bition days,  and  it  reads  as  follows: — • 


FORMS  FOR  OTHER  THAN  DIRECT  FIRE  LOSS  309 


"$....  beino-  this  Company's  pro  rata  share  of  the 
agreed  expense  and  profit  of  Assured  incurred  and  arising  from 
the  carrying  on  of  an  exposition  or  show  in  the  ....  IniiUl- 
ing,  located  .....  it  is  understood  and  agreed  that  if  by 
reason  of  fire  in  the  abo\  e-mentioned  premises,  the  Assured 
shall  be  pre\ented  from  carrying  on  the  show  for  the  full  time 
specified  in  the  contracts  \\-ith  exhibitors,  athertisers.  or  others, 
then  this  Company  shall  pa}-  to  the  x\ssured  its  pro  rata  share 
of  the  agreed  profit  and  expense  on  said  contracts,  or  the 
uncompleted  portion  thereof.  It  is  further  understood  and 
agreed  that  in  the  event  of  fire  so  damaging  the  building  that 
the  Assured  shall  be  prevented  from  carr}  ing  out  his  contracts, 
then  this  Company  shall  pay  its  pro  rata  share  of  the  agreed 
amount  of  expense  and  profits,  it  being  understood  and  agreed 
that  for  the  purpose  of  this  insurance,  the  amount  of  expenses 
and  profit  is  \  alued  in  the  sum  of  $.  .  .  .,  pro^•ided,  howe\  er, 
that  should  the  fire  occur  after  the  date  of  the  opening  of  the 
fair,  then  this  policy  shall  be  subject  to  deductions  of  g  per 
diem  for  such  time  as  shall  have  elapsed  between  the  day  of  the 
opening  of  the  fair  and  the  dav  of  the  fire." 

It  is  hard  to  define  just  what  this  form  is,  '•  Expenses  antl 
Profits"  and  some  of  both.  It  certainly  is  a  legitimate  contract  if 
an  insurance  coinpany  can  be  found  ready  to  undertake  it,  and  I  do 
not  doubt  that  there  are  those  that  will  gladly  do  so.  Surelv  it  is  a 
very  desirable  ])olicy  for  the  exhibitor  to  hold,  since  so  far  as  its 
protecting  him  goes,  he  has  very  little  to  worry  about  in  case  the 
premises  burn  up  during  the  exposition.  He  doubtless  has  fire 
insurance  to  pay  for  the  direct  loss  of  his  exhibits,  and  his  labor 
and  expected  profits  in  exhilnting  them  would  be  cared  for  under 
such  a  contract  as  the  abo\  e.  In  fact,  a  fire  would  be  as  good  as 
the  show,  possibly  better.  From  the  insurance  standpoint,  such  a 
form  must  be  regarded  like  the  horse  about  whose  merits  a  prospec- 
tive purchaser  asked  Abraham  Lincoln's  advice,  **  If  a  man  likes 
that  kind  of  a  horse,  that  is  the  kind  of  a  horse  he  would  like  I  " 

To  my  mind,  the  important  features  in  a  Use  and  Occupancy 
contract  are  embodied  in  words   like  the  following —  : 

"It    is   agreed   that   if  by  reason  of  fire  on  the   premises  A  Good  U. 
above    described    occurring   during    the     continuance   of    this  and  O. 
policy,  the  building  and  [or]  machinery  or  other  movable  prop- Form, 
erty  therein,  or  any  of  them,  in  whole  or  in  part  to  be  destroyed, 
or  so  damaged  as  to  entirely  suspend  the  production  of  finished 
goods,  then  this   Company  shall  be  liable  at   the  rate  of  1-300 
part  of  the  amount  of  this  policy  per  day  for  each  working 
day  of  such  prevention,  and  in  case  the  said  buildings  and  [or] 
machinery  or  other  property  therein,  in  whole  or  in  part,  be  so 


3J0  LECTURES  ON  FIRE  INSURANCE 


damaged  as  to  pre\eiit  the  making  of  the  full  daily  a\erage 
production  of  finished  goods,  then  this  Company  shall  be  liable 
per  day  for  that  proportion  of  1-oUO  part  of  the  amount  of  this 
policy  which  the  said  production  so  prevented  bears  to  the  full 
daily  a\erage  production  of  finished  goods. 

'' In  order  to  determine  the  full  daily  average  production 
of  finished  goods,  the  average  daily  production  for  the  corre- 
sponding period  of  the  previous  year  shall  be  taken,  subject  to 
such  increase  or  diminution  as  changes  in  the  capacity  of  the 
plant  or  condition  of  the  business  shall  warrant,  but  not  to  ex- 
ceed in  any  case  the  amount  of  this  policy. 

"  Loss,  if  any,  to  be  computed  from  the  day  of  the  oc- 
currence of  any  fire  to  the  time  when,  after  the  adjustment  of 
the  loss  on  the  above  described  property,  the  said  premises 
could  with  reasonable  diligence  and  despatch  be  replaced  and 
the  machinery  installed  therein,  but  not  to  be  limited  to  the 
date  of  expiration  named  in  this  policy." 

The  above  agreement  seems  to  me  to  cover  everything  that  can 
reasonably  be  expected  from  insurance  of  this  sort.  It  makes  no 
mention  of  profits,  but  it  aims  to  make  good  the  loss  of  producing 
power  to  the  extent  that  such  production  is  curtailed,  which  is,  to 
my  mind,  the  legitimate  object  of   Use  and  Occupancy  insurance. 

This  form  is  a  combination  of  a  number  of  forms  in  use  by 
large  manufacturers  and  merchants.  The  phraseology,  of  course, 
in  the  case  of  the  latter  having  to  be  changed  somewhat  to  accom- 
modate itself  to  the  difference  between  producing  and  trading. 

Rent  Insurance 

A  Good  Rent  We  have  already,  in  speaking  of  Rent  insurance,  given  an  illus- 

Form.  tration  of  what  seems  to  us  a  good  form.     Another  that  appears  to 

present  the  features  that  can  justly  be  considered,  might  read  : — 

"$  ...  on  the  Rents  of  the  ....  building  while 
occupied   ....   situate   .... 

"  It  is  understood  and  agreed  that  if  said  building  or  any 
part  thereof  shall  be  rendered  untenantable  by  fire,  so  as  ^o 
cau-ie  an  actual  loss  of  Rents  to  the  Assured,  this  Company 
shall  be  liable  for  such  loss  of  Rents  not  exceeding  the  sum 
hereby  insured. 

"  The  Assured  agrees  to  rebuild  or  repair  said  building  in 
as  short  a  time  as  the  nature  of  the  case  will  admit,  and  the 
sum  insured  will  be  taken  as  the  yearly  rent  of  the  building, 
and  this  Company  shall  be  liable  only  for  such  proportion  of 
anv  loss  as  the  sum  hereby  insured  bears  to  the  annual  rent  of 
said  building. 


FORMS  FOR  OTHER  THAN  DIRECT  FIRE  LOSS  SIJ 


"  Loss  to  be  computed  from  the  date  of  the  Hre  and  to 
cease  upon  the  building  being  again  rendered  tenantable.  In 
case  the  Assured  shall  elect  not  to  rebuild  or  repair,  then  the 
loss  of  Rent  shall  be  determined  by  the  time  which  would  have 
been  required  for  such  purposes." 

Then  follows  an  agreement  for  arbitration  in  the  event  of  dis- 
agreement over  the  time  required. 

This  Form  properl}-  protects  the  Assured  and  is  a  clearly  un- 
derstandable contract  on  the  part  of  the  Insurer.  There  is  a  ten- 
dency, unfortunatelv,  here  in  Boston  to  broaden  these  Rent  forms 
materiallv,  and  I  ha\e  before  me  one  that  is  not  satisfied  v\  ith  the 
actual  loss  of  Rent,  but  inserts,  in  a  rather  obscure  manner,  the 
words  "  or  Rental  value  to  the  Assured." 

Leasehold  Interest  Insurance 

A  leasehold   interest  form   that  embodies   what  seemed  to  me    A  Good 
the  proper  features  for  insurance  of  this  kind  would  read  : —  Leasehold 

T    ♦         f 

"$....   on  his  leasehold  interest  in  the   ....   build- 


ing occupied   ....   situate   .... 

"  It  is  understood  and  agreed  that  this  insurance  is  intended 
to  indemnify  the  Assured  against  loss  of  revenue  from  rents 
received  in  excess  of  amount  to  be  paid  by  him  to  ...  . 
under  a  certain  lease  of  said  premises  dated  ....  dav  of 
....   for  ....  years  at  the  yearly  rental  of   ...    . 

"  In  case  of  the  total  destruction  of  the  premises,  thereby 
vitiating  the  above-mentioned  lease,  then  this  Company  agrees 
to  pay  the  whole  amount  of  this  policy,  less  an  amount  for 
the  expired  part  of  the  year,  which  amount  for  the  purpose  of 
this  insurance  will  be  calculated  at  the  rate  of  $  ...  .  per 
annum  from  the   ....   dav  of   ...    . 

"  In  case  of  the  partial  destruction  of  the  premises  by 
which  the  lease  is  not  unimpaired,  then  this  Company  will 
pay  the  amount  of  Rent  so  lost  not  exceeding  the  rate  of 
$  .  .  .  .  per  annum  in  excess  of  amount  paid  to  the  lessor 
or  owner,  during  the  time  the  premises  are  untenantable," 
Then  follows  the  arbitration  clause   in  event   of  disagreement. 

This  form  may  seem  somewhat  cumbersome,  and  I  have  before 
me  several  specific  forms  relating  to  particular  properties  that 
in  certain  of  their  details  are  possibly  more  explicit,  but  the 
general  points  that  should  be  clearly  understood  by  both  parties  to 
the  contract  in  entering  into  an  agreement  of  this  sort,  seem  to  me 
to  be  well  and  definitely  fixed  by  the  form  quoted. 


Form. 


312 


LECTURES  ON  FIRE  INSURANCE 


Profit  Insurance 

A  Good  -"^  form  applicable  to  insurance  of  this  kind  can  easily  be  very 

Profit  Insur-  brief  and  at  the  same  time   fully  explicit.      In  fact,  a  form  like  the 
ance  Form,     following  would  seem    to  me   to   reach   adequately  almost  any  case 
that  might  arise  : — 

"$  .  .  .  .  on  the  net  Profits  derived  from  ....  busi- 
ness as  dealers  in  ...  .  contained  in  building  situated  .... 
on  profits  from  their  stock  in  trade,  their  own  or  held  by  them 
in  trust  or  on  commission  or  sold  but  not  delivered. 

"  In  case  of  total  loss  by  fire,  this  Company  shall  be  liable 
for  the  amount  hereby  insm-ed. 

"  In  case  of  partial  loss  by  fire,  this  Company  shall  be 
liable  for  such  proportion  of  the  amount  hereby  insured  as  the 
value  destroyed  bears  to  the  average  daily  value  of  said  stock 
for  the  year  preceding  the  date  of  said  fire,  subject,  however, 
to  variations  in  values  and  profits  as  shall  result  from  changes 
in  the  market  prices  of  materials,  supplies  and  manufacturing 
processes." 

While  this  form  is  absolutely  clear  in  all  of  its  provisions,  and 
it  certainly  serves  to  bear  out  what  we  have  already  said  in  speak- 
ing more  particularly  of  Profit  Insurance,  namely,  that  its  safe 
prosecution  is  wholly  dependent  on  the  evidence  of  satisfactory 
bookkeeping  on  the  part  of  the  Assured,  and  of  a  healthy  business 
condition  revealed  thereby. 


Sprinkler  Leakage  Insurance 

Sprinkler  Before  we  pass  on  to  forms  covering  in  extended  areas,  I  w  ant 

Leakage  In-    ^^■,   ^all  your  attention   to  one   other  increasingly  common  form   of 
surance.  insurance  against    other    than    direct    fire    loss.      There    is  an  old 

saying,  or  proverb,  to  the  effect  that  there  is  no  great  loss  without 
some  small  gain.  In  the  class  of  insurance  I  want  to  call  your 
attention  to  for  a  moment,  this  proverb  might  be  reversed  so  as  to 
read,  "There  is  no  great  gain  without  some  small  loss."  The 
installation  of  automatic  sprinklers  results,  not  only  in  greatly 
safeguarding  the  propertv  of  the  Assured  and  minimizing  the  losses 
that  otherwise  would  come  to  him,  but  also  it  enables  him  to  secure 
a  very  much  lower  rate.  The  benefits  certainly  are  great,  but 
with  this  great  benefit  and  saving  there  is  a  small  element  of  danger 
and  possible  loss. 

Insurance  for   loss  that  mav  be  caused  bv  leakage  of  an  auto- 
matic sprinkler  svstcm    is  becoming  more  and  more  of   a  necessity. 


FORMS  FOR  OTHER  THAN  DIRECT  FIRE  LOSS  3i3 

as  installations  of  these  systems  are  growing  more  common.  Sprinkler 
Fortunalel}',  the  mechanical  (le\ices,  not  only  in  the  sprinklers ^^'^*S^  ^'^" 
themselves,  but  in  the  way  they  are  attached  and  superxised,  have 
improved  so  greatly  that  the  percentage  of  claims  caused  by 
sprinkler  leakage  is  a  steadily  decreasing  one.  Accidents  will 
happen  though,  water  hammer  in  the  pipes  may  cause  a  weak 
sprinkler  to  slowly  develop  a  leak,  an  accidental  blow  either  from 
broken  machinery  or  the  careless  handling  of  a  ladder,  or  any 
other  movable  appliance  may  break  off  one  of  the  sprinkler  lieads. 
Or,  and  perhaps  this  is  the  most  frequent  cause  of  sprinkler  leak- 
age, freezing  of  the  water  in  the  system  will  cause  broken  pipes 
and  strained  sprinkler  heads.  It  speaks  well  for  the  system  that 
these  mishaps  are  but  seldom,  but  the  danger  is  a  present  one  and 
at  rare  intervals  damage  occiu^s  that  must  be  made  good  by 
insurance  of  some  sort. 

Since  sprinklers  are  directly  promoted  by  the  Fire  Insurance 
Companies,  ami  are  the  means  of  greatly  reduciiag  the  losses  that 
come  to  them,  and  since  their  installation  and  maintenance  are 
indirectly  supervised  by  these  Insurance  Companies,  it  is  only 
proper  that  they  should  guarantee  freedom  from  loss  on  insured 
properties  through  accidents  to  the  automatic  sprinkler  system 
from  other  agency  than  that  of  fire. 

You  are  doubtless  aware  that  the  damage  that  may  be  caused 
by  water  discharged  by  a  sprinkler  opening  in  the  event  of  a  fire 
is  as  much  cox  ered  by  the  direct  fire  policy  as  is  the  damage  caused 
by  the  fire  itself.  We  are  now  considering  the  damage  that  may 
result  from  a  sprinkler  discharging  owing  to  some  other  cause  than 
that  of  fire.  It  is  this  emergency  that  we  wish  to  guard  against, 
and  by  the  use  of  a  proper  form  in  the  policy  contract,  liability  of 
this  sort  may  be  assumed. 

Before  we  take  up  such  forms  in  detail,  there  are  certain 
features  which  must  be  carefully  taken  into  account  in  the  writing 
of  Sprinkler  Leakage  Insurance.  For  instance,  the  amount  that  it 
is  proper  to  carry  under  a  policy  of  this  sort.  The  general  prac- 
tice, I  believe,  is  that  where  sprinkler  insurance  is  carried,  it  should 
be  so  carried  as  not  to  exceed  5  per  cent  to  10  per  cent  of  the 
amount  that  is  insured  under  the  direct  fire  policies.  This  is 
assuming  that  the  insurance  under  the  fire  policy  represents  at  least 
90  per  cent  of  the  value  of  the  property  covered.  Conditions  will 
vary  with  different  risks,  the  points  principally  taken  into  considera- 
tion being,  what  is  the  greatest   damage  that  could  result  from  the 


314 


LECTURES  ON  FIRE  INSURANCE 


accidental  discharge  of  any  one  sprinkler,  owing  to  the  arrange- 
ment of  the  building  and  the  distribution  of  stock  or  machinery? 
You  can  see  readily  how  necessary  it  is  to  take  these  conditions 
into  account,  and  also  how  unlikely  it  is  that  more  than  one 
sprinkler  would  meet  with  accident  and  commence  discharging  at 
the  same  time. 

Companies  writing  insurance  of  this  character  have  no  fixed 
tariff,  but  each  contract  is  made  at  a  price  based  on  their  individual 
judgment,  after  full  information  regarding  the  property  to  be 
covered  has  been  secured.  The  construction,  arrangement  and 
height  of  the  building  should  be  known,  the  heating  and  lighting 
appliances,  the  make  of  sprinklers,  the  time  they  have  been  in 
service  and  the  presence  and  efficiency  of  an  automatic  alarm  svs- 
tem,  one  that  will  operate  by  the  motion  of  the  wafer  through  the 
system  and  not  be  dependent  upon  the  action  of  heat.  You  can 
readily  see  that  a  condition  of  sprinkler  leakage  brings  about  a 
state  of  affairs  where  the  ordinary  thermostat  system  or  heat  alarm 
would  not  be  effective,  while  a  rotary  alarm  operated  by  the 
motion  of  the  water  in  the  pipes  would  gi\  e  prompt  notice  that 
there  was  a  discharge  at  some  point  which  would  call  for  imme- 
diate attention.  So  far  as  we  can  learn,  the  general  situation  over 
sprinkler  leakage  insurance  is  that  the  same  is  usually  written  to 
about  the  extent  of  5  per  cent  of  the  value  of  the  property  covered 
with  a  varying  range  of  rates,  probably  a\'eraging  not  far  from 
f  of  1  per  cent. 

Some  companies  have  charters  sufficiently  broad  to  enable 
them  to  write  insurance  of  this  character,  while  others  are  restricted 
in  this  respect  antl  cannot  undertake  it.  Competition,  and  espe- 
cially the  attitude  taken  by  the  Mill  Mutuals,  has  caused  more  and 
more  of  the  stock  companies  to  include  insurance  of  this  character 
among  their  writings. 

The  form  for  sprinkler  leakage  insurance  issued  by  the 
Manufacturers  Mutual  Insurance  Companies,  ordinaril}-  reads  as 
follows  : — 


"To of 

Mutual  "In    consideration  of    the    maintenance  of  an  automatic 

Sprinkler  sprinkler  system  for  the  prevention  of  loss  by  fire  upon  the 

Leakage  property    insured    by  Policy  No of    the 

Form.  Manufacturers  Mutual  Insurance  Company  of 

"  The   said  Company  does  also  insure  the  party  thereby 
assured  against  all   loss  or  damage  that   may  occur  from   the 


FORMS  FOR  OTHER  THAN  DIRECT  FIRE  LOSS  315 

accidental  leakage  of  the  said  sprinkler  system  upon  the  prop- 
erty insured  against  hre  hy  the  policy  above  mentioned,  while 
the  said  fire  policy  continues  in  force  and  no  longer,  but  this 
policy  does  not  cover  damage  to  a  reservoir,  tank,  pipe,  or 
other  apparatus,  by  whose  failure  the  leak  is  caused. 

"  Provided  that  this  Company  shall  be  liable  for  only  such 
proportion  of  the  sprinkler  leakage  loss  as  the  aniount  insured 
on  said  property  against  fire  by  the  policy  above  mentioned 
bears  to  the  whole  amount  of  fire  insurance  thereon. 

"Provided  also  that  the  total  amount  of  insurance  under 
this  policy  shall  not  exceed  the  amount  of  the  fire  insurance 
policy  above  mentioned." 

Following  this  form  is  a  paragraph  providing  for  conditions 
of  cancellation. 

A  form  commonlv  used  by  the  stock  companies  for  insurance 
of  this  character  reads  as  follows: — - 


Stock  Com- 


panies 
Sprinkler 

"  Does  insure  ....  for  the  term  of  ....  from  the  dav  Leakage 
of  .  .  .  .  19  .  .  .  .,  at  noon,  to  the  ....  dav  of  ...  .  Form. 
19  .  .  .  .,  at  noon,  to  an  amount  not  exceeding  .... 
dollars,  to  wit :  Against  all  direct  loss  or  damage  caused  by 
the  accidental  discharge  or  leakage  of  water  from  the  automatic 
sprinkler  system,  including  tanks  supplying  it,  except  as 
hereinafter  provided,  in  or  on  the  buildings  now  erected  and 
occupied  wholly  or  partly  by  the  assured  (whether  the  accident 
occurs  in  the  portion  occupied  by  the  assured  or  not ),  des- 
cribed and  located  as  follows 

"And  the  companv  shall  be  liable  under  this  contract  for 
all  direct  loss  or  damage  sustained  by  the  assured  occasioned 
by  such  discharge  or  leakage,  provided  same  is  caused  by  any 
accident  (including  freezing),  and  applying  to  all  property, 
real  or  personal,  owned  by  the  assured,  or  to  the  property  of 
others  held  by  the  assured  in  trust  or  on  commission,  or  sold, 
but  not  removed,  and  for  which  the  assured  is  legally  liable, 
while  situate  upon  the  premises  above  described,  but  this 
company  shall  not  be  liable  for  loss  or  damage  occasioned  by 
such  discharge  or  leakage,  when  such  discharge  or  leakage  is 
caused  by  fire,  lightning,  earthquake,  explosion,  invasion  of 
foreign  enemies,  civil  commotions,  riots,  any  military  or 
usurped  power,  order  of  civil  authority,  or  any  fraudulent  act 
of  the  assured.  It  is  further  understood  and  agreed  that  the 
entire  liability  of  this  company  under  this  contract  shall  under 
no  circumstances  exceed  the  sum  insured,  for  any  loss,  claim, 
or  damage  whatsoever,  and  that  this  company  shall  not  be 
liable  under  this  contract  for  any  loss  or  damage  to  the  auto- 
matic sprinkler  system  itself." 

Oftentimes    this    contract    is    followed    by    numerous    clauses 
regarding  certain  exempted  properties,    permits  for  alterations,   a 


3J6  LECTURES  ON  FIRE  INSURANCE 


description  of  the  niethotl   to   be  followed   in  the  event  of  loss,  and 
the  filing  of  a  claim  thereunder.      Also,   provisions   for  the  manner 
in  which  such  a  policv  may  he  cancelled. 
Stock  Com-  You    will  note    that   in   the   main   these   two   contracts   of  the 

pany  Forms  Mutiials  and  of  the  Stock  Companies  are  essentially  the  same, 
vs.  Mutual,  though  the  phraseology  varies  somewhat.  The  ^^utual  form 
eliminates  '"damage  to  reservoir,  tank,  pipe  or  other  apparatus  bv 
whose  failure  the  leak  is  caused,"  while  the  Stock  form  says 
nothing  about  that,  assuming,  evidentlv,  that  leakage  from  a 
sprinkler  system  that  woidd  cause  damage  would  doubtless  be  con- 
fined to  the  sprinklers  themsehes.  The  Stock  form  further 
eliminates  loss  for  mishaps  that  might  occur  from  what  are 
ordinarilv  termed  "Acts  of  God,  or  the  Nation's  enemies,"  while 
the  Alutual  form  makes  no  mention  of  loss  under  such  conditions 
not  being  covered  bv  the  contract.  Perhaps  the  more  important 
feature  of  contrast  in  these  two  contracts  is,  that  while  the  Mutual 
form  states  that  "  This  Companv  shall  be  liable  for  only  such 
proportion  of  the  sprinkler  leakage  loss  as  the  amount  insured  on 
said  propertv  against  fire  bv  the  Policv  above  mentioned,  bears  to 
the  whole  amount  of  fire  insiu'ance  thereon  :  "  reference,  you  note,  is 
made  here  to  the  fact  that  is  brought  out  in  the  first  paragraph  of  the 
jSIutual  form,  namelv,  that  this  sprinkler  leakage  insurance  is  made 
a  part  of  a  regular  fire  policv.  The  Stock  form  we  are  discussing 
is  a  sprinkler  leakage  form,  pure  and  simple,  whollv  independent  of 
the  fire  insurance  policies  (jn  the  same  prtjperty.  Therefore,  no 
reference  to  them  would  be  needed. 

Either  of  these  forms  is  good  and  seemingly  free  from  defects. 
Thev  are  surely  clear  in  every  intent  and  are  desirable  policies  for 
an  assured  to  have,  especially  at  the  low  cost  at  which  to-day 
insurance  of  this  character  can  be  obtained.  • 

At  times  sprinkler  leakage  policies  give  rise  to  very  puzzling 
questions  in  connection  with  losses.  The  worst  conundrum  of 
this  character  that  has  ever  been  referred  to  me,  and  regarding 
which  the  correct  ruling  is  still  a  matter  of  doubt,  is  the  follow- 
ing:  You  will  note  that  sprinkler  leakage  policies  state  that  they 
instire  against  direct  loss  or  damage  sustained  by  the  assured  by 
water  discharge  or  leakage  from  the  automatic  sprinkler   svstem. 

Under  the  above  stipulation  the  cjuestion  is  raised  as  to  what 
would  be  the  condition  where  a  leakage  froin  the  sprinklers  caused 
a  short  circuiting  of  the  electric  system  and  a  resulting  fire? 
Would  the  assured  look  for  the  recovery  of  his  total  damage  from 
his  sprinkler  leakage,  or  his  fire  policies? 


IV. 
FORMS  OF  EXTENDED  AREA 

What  do  we  mean  by  this?  The  usual  hre  policy,  after  Forms  to 
describing  the  property  covered,  defines  the  locality  where  it  is  Cover  in 
insured,  that  is,  it  fixes  its  field  of  operation  in  some  one  place.  More  than 

T  111  1  •  •      .    1     ^  •     j:     .^  •  11      One  Place. 

it  wcjiild  he  not  onlv  \ery  incon\'enient,  hut  m  tact  nnpossible, 

with  moving  properties  to  protect  them  against  fire  loss  in  their 
journeyings,  by  issuing  a  separate  policy  to  co\  er  in  e\  ery  place 
that  they  might  be  in.  Forms  are  devised,  therefore,  to  co\er  in 
any  place  where  such  moving  properties  might  be.  All  marine 
insurance  forms  are  of  necessity  of  this  nature.  A  marine  policy 
derives  its  name  from  its  being  originally  devised  to  insure  proper- 
ties in  transit  by  water.  Properties  being  carried  by  ships  or  boats 
from  one  place  to  another  on  the  water.  Insurance  of  this  sort  was 
one  of  the  \  ery  first  forms  to  come  into  use.  The  perils  of  the 
sea,  both  from  shipwreck  and  fire,  were  recognized  long  before  the 
danger  of  loss  from  fire  to  properties  on  the  land  was  given  much 
thought.  As  time  has  gone  on,  the  broad  covering  quality  essential 
to  the  marine  policy  has  been  found  applicable  to  moving  properties 
on  land  as  well  as  sea,  and  in  consequence,  all  forms  covering 
property  in  changing  locations  have  partaken  of  much  that  origin- 
ally was  confined  to  strictly  marine  or  water  borne  risks.  The  auto- 
mobile policies  now  being  written  so  freely  are  good  illustrations  of 
the  way  in  which  the  marine  form  is  now  being  used.  The  ordi- 
nary marine  policy  usually  confines  itself  to  property  while  in  some 
particular  vessel  or  vessels,  it  not  only  protects  against  loss  from 
perils  of  the  sea,  at  some  one  particular  point,  but  anywhere  that 
the  journe^•ings  of  the  containing  vessel  may  reach.  In  the  same 
way  the  fire  policy  designed  to  co\  er  moving  property  does  not 
specify  that  its  protection  shall  be  limited  to  that  property  in  some 
one  particular  place.  Its  purpose  is  to  protect  the  property  any- 
where within  certain  more  or  less  widely  defined  limits.  Such 
policies  in  a  general  way  are  described  as  floaters. 

The  use  of  this  title  in  defining  a  certain  class  of  fire  i"-^i^"'3ii*-'<-' Floaters, 
policies  is  a  very  broad  one.      In  fact,  its  meaning  in   England   is 
quite   different  from  that  attaching  to   it  in  this  country.     There 


318  LECTURES  ON  HRE  INSURANCE 

they  speak  of  a  '•  floater"  as  a  policy  that  is  (le\ise(l  to  sort  of  till 
in  the  shortages  of  other  more  speciflc  insurazice,  that  may  be  dis- 
closed by  destroyed  \alues  at  the  time  of  a  loss.  They  use  it  more 
in  the  way  that  we  speak  of  ''excess"  insurance.  We,  while  we 
regard  excess  insurance  as  one  kind  of  floater,  still  speak  of  it  as 
excess  and  confine  the  use  of  the  name  "floater"  to  an  insurance 
that  travels  with  a  m()\able  ]:)ropertv  t)r  properties  that  are  in  vari- 
ous somewhat  indeflnitely  defined  locations.  We  think  of  it  as  a 
sort  of  Guardian  Angel,  and  when  injur\-  b\-  Are  occurs  to  anv  of 
the  property  under  its  care,  it  at  once  interposes  itself  and  seeks  to 
alleviate  the  loss.  It  is  a  kind  of  journeying  phvsician,  e\  er  with 
the  tra\eler  and  always  at  hand  to  restore  him  to  health  if  possible. 
There  are  many  forms  wliich  insurance  of  this  sort  ma\-  take. 
There  are  those  that  are  de\ised  for  some  specific  propertv  and 
specified  owner,  of  which  the  most  common  form  is  what  is  known 
as  a  "•  Tourist  Policy.''''  Then  there  ai^e  those  that  are  designed 
to  cover  miscellaneous  goods  in  the  hands  of  transporting  com- 
panies or  indi\iduals  who  hold  the  same  in  the  capacitv  of  "  Covi- 
mo7i  Carriers."  Both  of  these  classes  are  floaters,  in  the  broad 
sense  in  which  that  term  is  used,  though  thev  raise  \erv  different 
questions  in  the  treatment  which  should  be  accorded  to  each.  Let 
us  in  considering  forms  applicable  to  insurance  covering  in  extended 
areas,  first  confine  ourselves  to  the  forms  used  in  connection  with 
so-called  tourist  policies. 
Tourist  Poll-  -^  policy  of  this   character,  is,  as   its   name  implies,  especiallv 

cies.  designed  to  accommodate  those  who   are  engaged  in  tra\eling  and 

who  naturally  desire  to  carry  with  them  propertv,  usuallv  in  the 
form  of  clothing  and  personal  belongings,  though  at  times  the 
forms  are  extended  so  as  to  cover  things  that  are  not  ordinarilv 
found  with  belongings  of  this  character.  Some  of  the  forms  attach- 
ing to  policies  of  this  nature  are  extremelv  broad  and  protect  against 
loss  or  damage  from  more  than  fire  alone  ;  in  fact,  thev  are  practi- 
cally marine  policies  in  their  make-up.  A  marine  form  for  this 
purpose  reads  substantiallv  as  folk)ws  : — 

Marine  "  This  policy  witnesseth  that    ....    is  insured  in  the  sum 

Tourist  of  $   ...    .    from    ....  to   ...    .  on  baggage  and  [or]  per- 

Form.  sonal  effects  being  the  property  of  the  Assured  or  anv  member 

of   his    family    or   ser\ant   accompauNing   the   Assured    or  his 

famih'. 

"This  policy  attaches  from  the  time  the  property  insured  is 

taken  from  the  residence  of  the  Assured  and  continues  where- 

e\  er  said  property  mav  accompanv  the  Assured  or  his  family 


FORMS  OF  EXTENDED  AREA  319 

durin^  the  term  of  the  policy,  co\eriiig  all  the  risks  and  perils 
of  fire,  lightning,  navigation  and  transportation,  including  the 
risk  of  theft  as  described  hereafter,  while  being  transported  by 
any  railroad,  express,  transfer  and  [or]  transportation  company 
and  [or]  by  any  steamship,  steamboat  or  craft  on  the  ocean 
or  on  inland  watei's,  and  to  coyer  the  risk  of  fire  and  lightning 
while  in  any  hotel,  dwelling,  business  building"  and  [or]  other 
repository,  excepting  theatres  and  other  places  of  public  amuse- 
ment. 

"This  policy  co\  ers  while  on  board  of  any  yacht  against 
loss  caused  only  by  stranding,  sinking,  burning  or  collision  of 
the  yacht. 

"  It  is  understood  that  this  policy  covers  against  loss  by 
theft  while  in  the  custody  of  any  common  carrier  or  other  bailee 
(that  is,  the  person  to  whom  the  goods  are  committed  in  trust) 
and  is  also  to  coyer  against  loss  by  theft  of  entire  trunks,  valises 
or  other  shipping  packages  from  rooms  occupied  by  Assured, 
or  when  checked  in  any  hotel  or  boarding  house,  provided  that 
the  local  police  authorities  are  notified  immediately  upon  dis- 
covery of  loss,  but  this  clause  shall  under  no  circimistances  be 
construed  to  include  pilferage,  nor  the  loss  by  theft  of  articles 
in  the  custody  of  the  Assured,  only  as  herein  mentioned. 

"  This  policy  does  not  cover  or  attach  in  the  residence  of 
the  Assured  nor  on  property  specifically  insured,  nor  in  storage, 
nor  on  automobiles  or  motorcycles  and  their  appurtenances  or 
equipments. 

"  This  Company  shall  not  be  liable  for  loss  of  accounts, 
bills,  currency,  deeds,  evidences  of  debt,  money,  notes  or  securi- 
ties, under  any  circiunstances,  nor  for  loss  of  jewelry  or  similar 
valuables  by  theft." 

Following  the  above  more  important  paragraphs,  there  are  a 
number  of  warranties  frequently  attached  to  a  policy  of  this  nature 
regarding  breakage,  risks  of  war,  limitation  of  value,  conditions 
that  might  arise  when  the  property  covered  is  in  several  places  at 
the  same  time,  disregard  of  particular  a\'erage  and  provisions  for 
cancellation.  In  this  country,  policies  of  this  character  are  only 
limited  usually,  so  far  as  the  area  in  which  they  apply,  by  the  limits 
of  the  United  States  and  Canada  and  on  steamers  or  sailing  vessels 
between  places  in  these  two  countries. 

"^'ou  will  note  that  a  form  like  this  protects  against   other   loss   Cover  More 
than  that  which  may  he  caused  either  directly  or  indirectly  h\  fire.    Than  Fire 
Since  a  form  of  this  nature  is  so  comprehensive,  it  is  usually  desired 
in  preference  to  one  that  simply   safeguards  against  a  fire  loss,  and 
its  issuance  is  confined  to  such  companies  as  are  chartered  to  do  a 
marine  business.     As  we  are  considering  forms  applicable  to  fire 


Damage. 


320 


LECTURES  ON  FIRE  INSURANCE 


Ordinary 
Tourist 
Form — Fire 
Liability 
Only. 


policies  only,  anil  also  since  the  majority  of  tii"e  companies  are  not 
operating  under  charters  sufficiently  broad  to  enable  them  to  assume 
all  of  these  outside  hazards,  we  will  pass  on  to  the  consideration  of 
such  a  form  as  is  directly  applicable  to  the  ordinary  tire  policy.  A 
form  of  this  nature  will  read  substantialh-  as  follows  : — 

'•$....  on  .  *.  .  .  (usually  wearing  apparel  and 
personal  effects)  the  property  of  the  assured  and  members  of 
the  family  whereyer  they  may  go  in  the  United  States  of 
America,  Mexico  or  Canada,  or  while  being  transported  by 
train,  boat  or  conyeyance  of  any  kind. 

"It  is  understood  and  agreed  that  this  policy  does  not 
cover  in  any  place  where  the  assured  has  specific  insurance  on 
the  above  described  property. 

"It  is  understood,  if  in  any  case  of  loss  and  by  reason  of 
such  loss  the  assured  shall  acquire  a  right  of  action  against  any 
individual,  firm  or  corporation,  for  damage  to  the  property 
above  described,  he  Avill  sign  and  transfer  such  claim  to  this 
company  upon  receiving  payment  for  loss  from  this  C(mipany 
and  subrogate  this  company  to  all  his  rights  and  demands  of 
every  kind  respecting  the  same  and  permit  suit  to  be  brought 
in  his  name,  but  at  this  company's  risk  and  expense. 

"  In  case  the  property  above  described  shall  be  in  different 
places,  this  policy  covers  at  each  place  that  proportion  of  the 
whole  amount  of  this  polic\-  that  the  value  of  the  property  in 
each  bears  to  the  value  of  all. 

"But  it  is  at  the  same  time  declared  and  agreed  that  any 
property  included  in  the  terms  of  this  policy  shall  at  the  time 
of  any  tire  be  insured  in  any  Marine  Insurance  Company,  this 
policy  shall  not  extend  to  cover  the  same,  excepting  only  as  far 
as  relates  to  any  excess  of  value  beyond  the  amoimt  of  such 
Marine  Insurance  or  Insurances,  and  shall  not  be  liable  for  any 
loss  vmless  the  amount  of  such  loss  shall  exceed  the  amount  of 
such  Marine  Insurance  or  Insurances,  which  said  excess  only 
is  to  be  under  the  protection  of  this  policy,  it  being  the  true 
intent  and  meaning  of  this  agreement  that  this  company  shall 
not  be  declared  liable  for  any  loss  unless  the  amount  of  such 
loss  shall  exceed  the  amount  of  the  Marine  Insurance  or 
Insurances,  and  then  only  for  such  excess." 

Vou  will  note  that  under  a  policy  of  this  kind  one  may  insure 
against  fire  loss  anything  that  the  Insurance  Company  will  accept 
and  allow  to  be  incorporated  in  the  property  described  in  first 
paragraph  of  the  form.  You  will  also  note  that  such  a  form  pro- 
tects the  property  wherever  it  may  be  in  the  United  States, 
Mexico  and  Canada,  not  onl\  while  it  is  in  hotels  or  other 
buildings,  but  also  while  it  is  on  railroad  trains  or  steamlioats, 
either  standing  or  in  transit. 


FORMS  OF  EXTENDED  AREA  32J 


Vou  will  also  note  that  this  form  ceases  to  apply  at  any  point 
where  the  assured  has  this  same  property  specifically  insured.  For 
illustration,  suppose  that  a  party  intending  to  tra\el,  packs  his 
trunks  in  readiness  for  his  joiu^nev,  takes  out.  from  a  certain  date,  a 
Tourist  Floater,  such  as  we  are  describing,  and  before  his  trunks 
have  been  taken  from  his  dwelling  a  fire  occurs  and  damages  these 
trunks  and  their  contents.  If,  under  these  conditions,  the  assured 
has  a  policy  covering  the  contents  of  his  dwelling,  he  must  look  to 
that  for  his  indemnity.  If,  on  the  other  hand,  he  has  not  such  a 
policy,  but  does  hold  the  Tourist  Policy  referred  to,  it  could  be 
claimed  that  the  Tourist  Policy  coxered  under  this  form,  even 
though  the  journey  had  not  actually   commenced. 

Some  forms  still  further  define  the  liability  in  a  situation  of 
this  sort  h\  stating  that  the  policy  attached  from  the  time  the 
property  is  taken  from  the  residence  of  the  assured  and  ceases  to 
apply  as  soon  as  this  property  returns  to  the  residence  in  question, 
thus  eliminating  the  doubt  that  we  have  said  might  arise  where 
there  was  no  specific  insurance  on  the  tourist's  home. 

The  Subrogation  Clause,  forming  a  part   of  the   form   ^\  e   are  The  Subro- 
considering,    is   surely    a     reasonable    provision,    for   it    woidd   begation  Feat- 
manifestly  unfair  either  for  the   assured  to    collect   damages  both"*"^* 
from  the  Transporting  Company  and   the  Insurance  Company  for 
injury    to    the    same    property,   and    at    the   same  time   to  ask  the 
Insurance  Companies  to  stand  a  loss  that  was  guaranteed  against 
by  the  Transporting    Company.     Consequently,   if  the  Insurance 
Company  pays  for  the  loss  or  damage  to  the  property,  while  in  the 
hands  of  the  Transporting  Company,   it  is  only  reasonable  that  the 
right   shoidd  be  accorded  it   of  taking   subrogation,    or  that   is,    of 
having  granted  to  it  the  same  rights  of   collection  from  the  Trans- 
porting  Company   that   the   assured    under   his  contract  with    the 
Transporting  Company  was  in  possession  of. 

The  clause  providing  that  if  the  property  covered  is  in  several  An  Average 
different  phices,  that  the  proportion  of  the  whole  amount  of     the  Provision  Es- 
insurance    under    the    policy   that    is  applicable    to  the   particular ^^°**^^* 
location  affected  by  the  fire  shall  be   regarded   as  the   insurance  at 
that  particular  point,  is  a  simple  application  of  the  Average  Clause. 

Assume,  in  illustration  of  this,  that  a  tourist  had  three  trunks 
containing  property  of  equal  ^  alue  and  that  incident  to  the  circum- 
stances of  his  journey  two  of  these  trunks  were  at  a  hotel,  while 
the  third  remained  at  a  railroad  station,  and  that  a  fire  occurred  at 
the  railroad  station  that  damaged  the  trunk  therein  stored.      Under 


322 


LECTURES  ON  FIRE  INSURANCE 


the  provision  referred  to,  one-third  of  the  policy  is  covering  in 
the  raih-oad  station  and  is  liable  for  the  loss  to  the  trunk  therein 
stored. 

The  final  paragraph  of  the  form  under  discussion  raises  the 
excess  feature,  and  you  will  recall  that  I  ha\e  already  said  that  excess 
insurance  is  of  the  nature  of  a  floater,  and  as  we  purpose  discussing 
excess  insurance  a  little  more  fully  later  on,  we  will  defer  speaking 
in  detail  of  this  particular  clause. 

While  the  features  that  we  have  been  mentioning  may  be  mainly 
defined  as  forms,  there  are  some  provisions  mentioned  distinctly 
of  tiie  nature  of  clauses.  Since  these  so-called  "clauses,"  such 
as  the  Subrogation  Clause,  the  Average  Clause,  the  Exemption 
of  vSpecific  Insurance  Clause,  ha\  e  an  essential  and  \  ery  direct 
bearing  on  the  form  as  a  whole,  it  seemed  best  to  anticipate  some- 
what, and  speak  of  them  as  we  have  done. 
Traveling  ^^'ot  infrequently  the  underwriter  is  called  upon  to  insure  some 

Property.  specific  piece  of  traveling  property,  and  the  exercise  of  careful 
thought  is  necessary  in  determining  whether  insurance  of  this  char- 
acter is  desirable  or  not.  To  illustrate  this,  let  us  assume  that  the 
subject  of  the  insurance  is  a  highly  \alued  \iolin  that  a  certain 
artist  wishes  to  take  with  him  to  ^arious  summer  hotels  for  concert 
purposes.  Here  is  a  very  susceptible  piece  of  propertv,  and  while 
it  is  an  article  that  can  usually  be  easily  saved,  and  if  it  is  really 
valued  by  the  owner,  undoubtedly  would  be  the  first  thing  he  would 
try  to  save  in  the  event  of  a  fire  occurring,  yet  the  opportunities  sug- 
gested for  an  excessi\-e  claim,  that  could  probably  be  maintained, 
are  A-ery  great.  The  Assured  usually  regards  the  risk  attendant  on 
an  article  of  this  kind  as  very  slight,  and  expects  that  the  insurance 
can  be  written  at  just  as  low  a  rate  as  he  obtains  on  his  household 
furniture,  including  a  piano  and  other  musical  instruments  at  his 
home.  In  such  a  condition  as  we  are  describing,  the  owner  mav, 
quite  likely,  be  living  in  a  dwelling  where  the  contents  are  rated  at 
say  75  cents  for  5  years.  When  he  commences  to  tra\el,  he  and 
his  violin  may  be  in  summer  hotels  of  varying  merits,  rated  all  the 
way  from  2  to  ^h%  per  annum.  It  is  difficult  to  get  a  man  to  see 
just  why  he  should  pay  a  higher  rate  the  minute  his  violin  lea\  es 
his  home.  In  considering  a  proposition  of  this  kind,  actual  knowl- 
edge of  the  true  value  of  the  property  invoh  ed  is  a  very  essential 
thing,  and  while  the  form  and  the  rate  cannot  reach  it,  the  under- 
writer is  certainly  beholden  to  consider  the  character  of  the  Assured 
very  tlosely  and  to  feel  confident  that  he  reallv  prefers  the  violin  to 


I 


FORMS  OF  EXTENDED  AREA  323 

the  money  which  mi<j;ht  he  easily  obtainalile  under  such  a  policy  as 
we  are  speaking  of. 

I  have  dwelt  thus  at  length  on  this  simple  illustration,  because 
it  serves  to  show  the  hazards  and  opportunities  that  are  presented 
to  an  unscrupulous  property  owner  under  a  policy  of  this  kind. 
How  easy  it  is  in  a  summer  hotel,  for  instance,  for  a  lamp  to  be 
tipped  over  and  an  alleged  $500  violin  ruined  without  at  the  same 
time  having  the  entire  building  burned  up  I 

The  main  objection  to  floaters  is  that  the  more  extended  the   The  Main 
area  of  their  operation    the  greater  the  opportimity  for  loss  and  the   Objection  to 
greater  the  difficulty  in  determining  ecpiitably  the  actual  amount  of   Floating  In- 
that  loss,  renders  them  a   class  of  insurance  that  should  bear  very   ^"'■^""* 
close  scrutiny  and  that  shoidd  call  for  the  collection  of  a  commen- 
surate rate. 

Another  form,  and  the  more  important  one  probably,  attaching   Common 
to   policies   covering  extended  area  is  that  of  what  are  known  as   Carriers. 
Common  Carriers. 

Just  what  do  we  mean  by  a  *'  Common  Carrier"}  1  have 
been  interested  to  look  up  the  definition  of  the  same,  and  find  that 
competent  authorities  describe  it  as  follows  :  "A  common  carrier 
is  a  person  who  undertakes  to  carry  goods  from  place  to  place  for 
hire.  He  is  a  public  ser\'ant  and  is  bound  to  carry  and  is  respon- 
sible for  every  injury  occasioned  to  the  goods  by  any  means  what- 
soever, except  only  the  act  of  God  or  his  country's  enemies. 
Consequently,  when  goods  are  destroyed  by  fire,  the  Common 
Carrier  is  responsible  to  the  owner  whether  he  has  been  guilty  of 
negligence  or  not,  and  he  is  excused  from  liability  only  in  the  fol- 
lowing cases,  \yhich  usually  are  limitations  fixed  by  law,  as  to  his 
liability  in  his  capacity  as  a  Common  Carrier." 

"  First ^  where  the  transit  of  the  goods  is  ended  and  the  goods 
are  no  longer  in  his  custody  as  a  Carrier.  He  is  then  a  warehovise- 
man  and  is  subject  therefore  to  the  liability  of  an  ordinary  bailee, 
that  is,  the  person  to  whom  the  goods  are  committed  in  trust." 

"  Second^  where  he  is  exempt  from  liability  by  some  law  usu- 
ally denominated  the  "  Carriers'  Act." 

"  Third.,  where  by  the  terms  of  a  special  contract  between 
himself  and  the  bailor  (that  is,  the  person  who  delivers  goods  to 
another  in  trust)  he  is  exempt  from  liability.  For  example,  a 
railroad  company  entering  into  a  contract  to  carry  goods  to  a 
place  beyond  the  limits  of  its  own  line  and  situated  upon  the  line  of 
another  company,  does  not  cease  to  be  liable  when  the  goods  are 


324  LECTURES  ON  FIRE  INSURANCE 


transferred  to  the  other  company.  If.  therefore,  the  goods  are  de- 
stroyed by  fire  while  being  carried  by  the  second  company,  the  first 
company  is  resjDonsible  by  virtue  of  the  contract  which  is  made, 
ahhough  the  other  company  may  also  be  liable  to  the  owner  for  the 
loss." 

The  law  usually  relieves  the  Common  Carrier  of  liability  for 
certain  specified  properties  of  high  \alue,  such  as  jewelry,  gold,  or 
silver  coin,  stamps,  notes,  securities,  unless  at  the  time  of  delivery 
of  them  to  him  both  the  value  and  the  nature  of  such  articles  shall 
ha\  e  been  declared  and  in  accordance  therewith  charges  either 
paid  or  an  engagement  to  pay  the  same  accepted  by  the  person  who 
may  receive  the  consignment.  For  such  special  articles  the  Carrier 
may  demand  an  advanced  rate  or  charge  which  is  to  be  guaranteed 
by  a  receipt  of  notice  attached.  Carriers  who  omit  to  aftix  such  a 
notice  are  precluded  from  the  benefits  so  far  as  the  right  to  the 
extra  charge  is  concerned,  but  even  in  that  case  are  entitled  to  a 
declaration  of  the  value  and  nature  of  the  goods,  but  they  are  pro- 
hibited from  attempting  to  limit  their  liability  by  public  notice  as 
to  the  articles  not  exempted  by  law.  Special  contracts,  however, 
may  be  allowed. 

The  reason  that  we  have  spoken  of  these  features  of  Common 
Carrier  liability,  is  because  it  is  under  them  that  so  frequently  in 
claims  under  a  fire  policy  insuring  Common  Carriers'  liability,  con- 
ditions arise  wholly  unlooked  for  by  the  party  issuing  the  policy,  and 
it  is  desirable  therefore  that  in  the  event  of  there  being  some  special 
allowances  or  restrictions  imposed  by  the  contract  or  receipt  issued 
by  the  Common  Carrier  in  accepting  goods,  that  the  fire  policy 
should  either  disclose  or  at  least  call  attention  to  them.  A  good 
illustration  of  this  has  occurred  in  a  couple  of  losses  that  have  re- 
cently been  up  for  consideration.  Here  is  a  form,  reading  for  the 
A.  &  C.  Railroad:  — 

An  Ordinary  '*  On  merchandise  and  goods,  their  own  or  for  which  the 

R.  R.  Carrier  insured  may  be  liable  or  held  by  the  insured  as  Common  Car- 

Liability  riers  or  warehousemen,  or  under  any  bill  of  lading,  including 

Form.  all  charges  therein  ad\  anced  or  due  to  other  Unes  or  railroads, 

or  steamboats  carrying  such  merchandise  or  goods  as  they  may 
have  in  their  custody  or  for  which,  and  to  such  extent  and 
amounts  as  they  are  in  any  manner  responsible,  also  all  express 
pertaining  thereto,  and  on  all  stock  materials  and  supplies,  all 
contained  in  and  on  frame  buildings  and  structures  and  outside 

on  wharf  on  premises  known  as  piers  No situate 

Permission  is  hereby  gi\en  to  have,  store  and  keep  and  use  such 
goods,  merchandise  and  articles  as  are  incidental  to  the  trans- 


FORMS  OF  EXTENDED  AREA  325 

portation  companies  and  the  business  of  railroads,  steamboats 
and  vessels,  and  to  have,  keep  and  use  camphene,  chemical  and 
coal  oils  and  burning  fluids ;  to  use  hoisting  engines  and 
to  work  nights,  and  for  other  insvu-ance  without  notice  until 
requested. 

This  policy  insures  loss,  if  any,  payable  to  said  A.  &  C. 
Railroatl,  whether  that  company's  interest  is  direct  or  as 
lessee  of  some  other  corporation,  it  being  understood  that  this 
structure  is  upon  the  property  of  one  of  the  corporations  whose 
property  it  holds  through  lease." 

Then  follows  a  Mechanics'  Permit,  Electric  Light  Permit, 
Lightning,  Automatic  Fire  Alarm  and  Watchman's  Clock  Clauses. 

The  intent  of  this  policy  seems  clearly  to  be  to  insure  the  said  Common 
A.  &  C.  Railroad  in  their  capacity  of  Common  Carriers,  and  a  lossCar""s. 
having  occurred  on  the  premises  in  question,  the  sums  required  of 
the  Railroad  on  account  of  damaged  merchandise  were  in  turn  paid 
to  it  by  the  insuring  companies.  Later  it  appeared  that  certain  of 
the  owners  of  goods  and  merchandise,  claimed  to  have  been  lost  in 
the  fire,  brought  suit  against  the  A.  &  C.  Railroad  and  all  of  the 
companies  insuring  it,  on  the  ground  that  the  policies  were  taken 
out  by  the  Railroad  as  well  for  the  benefit  of  their  consignors  as  for 
their  own  benefit,  ;ind  the  form  that  we  have  just  quoted  insured 
the  owners  of  the  goods  against  loss,  as  well  as  the  Railroad  in  its 
liabilitv  as  Common  Carrier. 

A  condition  of  this  sort  brings  out  the  fatt  that  e\ervthing 
must  depend  in  the  adjustment  of  such  a  claim,  as  to  how  far,  under 
their  contract  as  Common  Carriers,  the  Railroad  were  liable  to 
their  consignors.  How  this  suit  will  finally  be  di-posed  of  is  a 
matter  that  is  still  uncertain.  There  would  seem  to  be  nothing  in 
the  form  we  quoted  which  could  render  a  broader  interpretation 
than  that  in  the  second  line,  where  it  states,  "  as  Common  Carriers 
or  Warehousemen,"  and  again,  further  down,  "to  such  extent  and 
amounts  as  they  are  in  any  manner  responsible."  Everything,  you 
will  see,  depends  upon  the  limit  of  this  responsibilitA ,  and  that  can 
only  be  determined  by  knowing  exactly  what  is  the  nature  of  the 
contract  that  the  receipt  given  by  the  Railroad  to  its  consignors 
discloses. 

It  would  seem,  from  a  condition  such  as  the  one  we  have  just 
described,  as  if  some  uniform  law  was  necessary  defining  what  is 
meant  by  Common  Carrier  liability,  and  that  if  something  outside  of 
the  intent  of  such  defined  liabilitv  was  contemplated,  that  it  should 
also  be  requisite  to  have  it  fully  stated. 


326 


LECTURES  ON  FIRE  INSURANCE 


A  Conflicting 
Carrier  Form. 


A  Broad 
Form  for 
Chvner's  Lia- 
bility in 
Transit. 


An  effort  sometimes  to  avoid  complications  of  this  sort  is 
made  b}'  the  insertion  of  a  clause  in  addition  to  the  description  of 
the  rolling  stock  and  movable  property  of  a  railway.  An  illustra- 
tion is  before  me,  reading  :  — 

"All  articles,  materials  or  apparatus,  appurtenances  to 
operating  this  railway  and  for  maintaining,  repairing  and  ex- 
tending the  same,  their  own  or  held  by  them  belonging  to  others 
for  which  they  may  be  liable  and  on  freight  thereon  or  held  by 
them  belonging  to  others  for  which  they  may  be  liable,  con- 
tained in  any  of  the  buildings  of  the  said  Railroad  or  in  any 
of  its  cars  at  any  point  upon  the  line." 

Among  the  many  restrictive  clauses  attached  to  the  foot  of 
this  form  is  one  reading  :  — 

'*  This  policy  does  not  cover  the  Assured's  liabilitv  as 
Common  Carrier." 

The  policy  in  question  is  a  straight  Fire  policv,  and  just  how 
to  reconcile  the  two  paragraphs  referred  to  is  something  of  a  puz- 
zle. Also,  it  is  only  fair  to  say,  the  final  arbitration  of  a  claim  that 
has  arisen  thereunder  is  yet  uncertain.  In  this  instance  a  certain 
party  delivered  certain  freight  to  the  road  for  transportation  and 
took  an  ordinary  receipt  therefor.  Apparenth-  the  first  paragraph 
reading,  "  on  freight  held  by  them  belonging  to  others  for  which 
they  may  be  held  liable,"  would  appear  to  make  the  road  liable  to 
the  consignor;  on  the  other  hand,  the  companies,  by  the  second 
paragraph,  would  appear  to  be  freed  from  liability  if  this  particu- 
lar freight  in  question  was  accepted  by  the  road  in  its  capacity  of 
Common  Carrier.  This  illustration  again  emphasizes  the  point  we 
have  already  spoken  of,  namely,  that  in  drafting  forms  of  this  sort 
the  position  of  the  Transporting  Company  can  only  be  clearly  de- 
fined when  the  nature  of  the  contract  into  which  it  has  entered  with 
its  consignor  is  fullv  disclosed. 

Some  of  the  difficulties  that  arise  in  the  insurance  of  Common 
Carriers  also  appear  when  ue  insure  directlv  for  its  owner,  property 
while  in  transit. 

An  interesting  and  still  unsettled  claim  has  arisen  untler  a  form 
of  this  nature,  reading  :  — 

"  On  merchandise,  principally  woolen  goods,  their  own 
or  held  in  trust  or  on  commission,  and  for  which  thev  may  be 

held    liable,   in    transit    between or  any  other  place 

in  the  United  States  to  Boston,  Mass.,  and  vice  \ersa,  and  at 
either  end  of  the  route  until  deli\erv,  subject  to  the  following 
conditions  of  a\erage  annexed  : — 


FORMS  OF  EXTENDED  AREA  327 

Other  Insurance  Permitted 

Averag'e    Claiise 

It  is  understood  and  a<^reed  that  in  case  of  loss  under  this   Owners' 
policy,  this  Company  shall  be  liable  only  for  such  proportion   Liability  in 
of  the  whole  loss  as  the  amount  of  this  insurance  bears  to  the   Transit, 
cash  yalue  of  the  ^yhole  property  herein  described  at  the  time 
of  the  tire. 

Lightning    Clause.''' 

The  claim  is  made  for  dama<;'e  caused  by  a  Hre  resulting  from 
sulphuric  acid  being  carried  in  the  same  car  \\  ith  the  property  (in 
this  case  machinery),  and  one  or  more  of  the  acid  carboys  becoming 
broken.  The  damage  was  done  on  any  one  of  the  four  days  occu- 
pied in  transit,  and  at  an  unknown  point  in  Pennsyhania,  New 
Jersey,  New  York,  Connecticut  or  Alassachusetts. 

The  following  questions  arise  : — 

1.  Under  tlie  form,  the  policy  being  written  in  Massachusetts, 
is  the  policy  liable  for  a  loss  in  any  other  state  ? 

Ans.      Yes. 

2.  Is  the  issuing  of  such  a  policy  legal,  since  it  covers  property 
that  may  be  outside  the  state  in  which  the  policy  is  written? 

Ans.  Yes,  the  policy  being  a  floater,  and  covering  property 
that  at  times  is  in  the  state  where  the  policy  was  written  ;  also  the 
assured  in  this  instance  were  a  Massachusetts  corporation. 

3.  Can  machinery  be  classed  as  merchandise,  and,  therefore, 
is  a  claim  valid  on  machinery  insured  as  merchandise? 

Ans.  Yes.  Merchandise,  in  its  broad  interpretation,  may 
mean  anything  movable. 

4.  Does  the  fact  that  the  merchandise  insured  is  described  as 
"  principally  woolens,"  free  the  Insuring  Company  from  liability 
in  this  case,  the  loss  being  on  machinery  ? 

Ans.  No.  "Principally"  does  not  limit  the  nature  of  the 
merchandise  to  woolens. 

5.  Does  the  fact  that  time  and  place  of  the  hre  are  both 
indeterminate  preclude  the  making  of  a  valid  claim? 

Ans.  No.  With  all  floating  policies  these  features  are 
necessarily  more  often  than  not  impossible  of  exact  determination, 
and  a  floating  form  of  policy  in  its  intent  clearly  admits  this. 

6.  Does  the  fact  that  the  fire  was  caused  by  the  transporting 
railroad  carrying  extra  hazardous  articles  in  the  same  car  with 
the  insured  "merchandise"  void  the  insurance  policy,  and  does  it 
give  the  said  insuring  company  the  right  to  demand  subrogation? 


328 


LECTURES  ON  FIRE  INSURANCE 


Common 

Carrier 

Liability. 


llie  answer  to  this  must  be  that  under  the  policy  the  insuring 
company  is  holden  to  pas'  the  loss,  since  there  are  no  restrictions 
in  the  form  as  to  tlie  methods  or  associations  of  carriage. 

The  right  to  sulirogate  the  raih'oad  by  the  Insurance  Companv 
when  they  ha\e  paid  the  loss  under  their  policy  is  clear.  Whether 
they  can  collect  from  the  railroad  or  not  will  all  depend  on  the 
state  laws  governing  the  carriage  of  acids,  and  the  nature  of  the 
contract  defined  on  the  receipt  given  the  Assured  bv  the  railroad 
on  the  latter  receiving  the  "  merchandise." 

We  ha^•e  made  use  of  this  claim  and  the  questions  that  arose 
under  it  to  bring  to  your  attention  some  of  the  conditions  that  arise 
in  floating  policies  of  this  somewhat  indefinite  nature. 

Thus  far  we  have  spoken  of  the  difficulties  that  confront  the 
framer  of  a  Common  Carrier  form,  and  doubtless  you  are  anxious 
to  know  how  a  form  should  be  drafted  to  satisfactorily  safeguard 
such  dif^culties  as  we  have  referred  to.  Some  of  these  are  written 
without  and  some  disclaiming  liability.  Good  forms  illustrating 
this  are  : — 

Common  Carrier  Liability  Form  when  Liability  is  not  Disclaimed 
Boston  &  Albany  Railroad  Co. 

"$  .  .  .  On  their  legal  liabilitv  in  or  for  all  merchan- 
dise and  [or]  baggage  and  [or]  freight  held  in  their  custodv  as 
common  carriers,  warehousemen,  wharfingers,  forwarders  or 
freighters  ;  also  upon  their  interest  in  all  advances  or  other 
charges  due  or  to  become  due  upon  all  merchandise  and  [or] 
baggage  and  [or]  freight,  while  contained  in  their  wharf  and 
shed  adjacent  to  elevator  situated,  etc. 

It  being  mutually  understood  and  agreed  that  if  claim  is 
made  against  the  assured  hereunder  for  merchandise  and  [or] 
baggage  and  [or]  freight  held  by  them  as  above  provided,  the 
insurers  shall  have  the  option  of  either  admitting  such  claim 
for  payment  or  of  resisting  it  in  court ;  the  legal  expenses 
incurred  in  such  resistance  to  be  borne  by  the  insurance  com- 
panies interested,  in  the  proportion  that  the  total  amount  of 
the  insurance  shall  bear  to  the  total  amount  of  such  claim  or 
claims." 

Note  the  optional  feature  of  the  second  paragraph.  This  is  in- 
serted because  so  frecpiently  a  Common  Carrier's  liability  hre  policy 
is  considered  as  covering  actual  property  damage  bv  fire.  True  it 
is  that  the  damage  causing  the  claim  under  such  a  policv  is  the  re- 
sult of  a  lire  loss;  but  the  subject  of  this  form  of  insurance  is  not 
the  propert\   in  the  custodv  of  the  carrier,  but  wliat  under  his  con- 


FORMS  OF  EXTENDED  AREA  329 


tract  as  a  carrier  is  he  obligated  to  make  good  to  the  consignor  of 
such  property  to  him. 

This  feature  is  often  overlooked,  and  it  is  just  such  oversight 
that  results  in  a  claim  being  made  like  the  one  we  have  already 
spoken  of  in  connection  with  the  A.  &  C.  Railroad. 

By  the  use  of  the  words  in  the  carriers'  form  we  are  consider- 
ing, "the  insurers  shall  have  the  option  of  either  admitting  such 
claim  for  payment  or  of  resisting  it  in  Court,"  the  insuring  com- 
pany admits  that  it  can,  if  it  so  elect  (governed  wholly  by  circum- 
stances), pay  a  direct  hre  loss  for  goods  burned,  even  should  such 
loss  exceed  the  carrier's  liability  for  them. 

This  is  a  large  hearted  form.  Instead  of  saying  tletinitely  that 
the  insurer  will  pay  for  a  certain  definite  thing  and  nothing  else,  it 
gives  him  the  option  of  doing  something  more.  It  removes  his  best 
weapon  of  defense ;  it  throws  aside  the  barrier  that  should  safe- 
guard him.  It  gi\es  the  claimant  the  right  to  ask  for  more  than  he 
paid  for.  Not  a  wholly  desirable  form  to  use.  Optional  features 
are  likely  to  lead  to  disagreements  and  create  prejudice. 

To  prevent  such  conditions,  there  is  in  use  a  form  for 

Common  Carrier  Liability  when  Liability  is  Disclaimed  Common 

Such  a  form  reads — ■  Carrier 


'•  Boston  &  Norfolk  Steamship  Co. 

$ On  their  legal  liability  in  or  for  all  merchandise  held 

in  their  custody  as  common  carriers,  warehousemen,  wharf- 
ingers, forwarders  or  freighters ;  while  contained  in  freight 
shed,  situate,  etc. 

The  purpose  of  this  insurance  is  to  indemnify  the  insured 
for  their  legal  liability,  if  any,  to  the  amount  they  are  obliged 
to  pay  on  such  merchandise  by  reason  of  loss  or  damage  by 
fire,  and  it  is  understood  that  liability  for  such  loss  or  damage 
by  fire  is  and  will  be  disclaimed  in  bills  of  lading,  shipping 
receipts  and  other  similar  documents. 

It  is  also  understood  and  agreed  that  all  claims  against  the 
insured  (pr()\ided  the  claim  or  claims  are  not  in  excess  of  the 
amount  insured)  shall  be  resisted  imder  the  direction  and  con- 
trol of  this  company,  the  cost  of  such  resistance  (whether  con- 
ducted by  the  insured  or  by  this  company)  to  be  paid  by  this 
company  in  the  proportion  that  the  amount  of  this  policy  bears 
to  the  total  amount  of  such  claim  or  claims. 

In  the  event  of  loss  hereunder,  this  company  shall  be 
subrogated  to  all  claims  upon  owners  of  merchandise  to  the 
extent  of  payment  made  to  the  said  steamship  company." 


Liability. 


330 


LECTUFIES  ON  FIRE  INSURANCE 


Excess 
Floater 
Insurance. 


Under  this  form  the  Insuring  Company  can  only  pay  for 
carriers'  liability, —  no  direct  merchandise  loss  is  admissible.  It 
fixes  the  limit  of  liberality  for  the  Insurance  Company  and  the  limit 
of  avarice  for  the  claimant.  It  is  a  wise  provision  and  it  saves 
dispute. 

Under  the  form  that  does  not  disclaim  further  liability  the  right 
of  subrogation  is  not,  in  fact  it  could  not  be,  asked.  Under  the 
form  that  does  disclaim  further  liability,  such  right  of  subrogation 
may  be  asked  and  you  will  note  that  it  is  incorporated  in  the  form. 

An  especial  safeguard  in  both  of  these  former  is  the  use  of  the 
word  "  Legal  "  in  the  first  line.  This  confines  the  liability  as- 
sumed under  the  policy  to  just  what  the  carrier  is  beholden  to  his 
consignors  for  as  specified  by  his  receipt  or  contract  with  the  latter, 
and  should  prevent  the  said  consignor  from  looking  to  the  carrier's 
policy  as  a  source  from  which  to  collect  further  loss  that  might 
ha^•e  been  sustained. 

The  last  form  of  floater  of  which  I  want  to  speak  to  you  at  this 
time  is  that  of  excess  floater  insurance. 

The  design  of  insurance  of  this  form  is  to  make  good  the  losses 
that  may  come  to  an  insured  through  a  shortage  of  specific  insur- 
ance at  some  location  where  he  may  ha^•e  insured  property.  Such 
excess  insurance  may  be  restricted  to  propertv  in  one  place  or  it 
may,  and  more  frequently  does,  cover  properties  moving  about  in  a 
more  or  less  extended  area.  As  it  is  usuallv  applied  to  insurance  on 
floating  properties,  it  is  well  to  discuss  it  here. 

Excess  insurance  is  that  taken  upon  any  subject  where  it  is  ex- 
pressly stipulated  that  the  amount  specified  thereon  shall  not  be 
liable  for  any  loss  until  all  specific  insurance  upon  the  subject 
property  shall  have  been  exhausted.  If  the  specific  insurance  is 
adequate  to  pay  the  whole  loss,  then  the  excess  insurance  does  not 
apply. 

Policies  of  this  sort,  whether  floating  or  not,  are  desirable  for 
the  assured.  Their  especial  field  of  value,  though,  is  under  the 
floating  form.  Where  goods  are  lialile  to  be  in  any  one  of  a 
number  of  locations  and  where  specific  insurance  is  carried  on  them 
in  each  one  of  these  locations,  the  time  may  occur  when,  owing  to 
a  congestion  of  these  goods  at  some  particular  place,  the  specific 
insurance  in  force  there  is  wholly  inadequate  to  cover.  Should  a 
loss  happen  at  such  a  time,  an  excess  floater  would  come  in  and 
further  indemnif\-  the  insured. 

The  form  for  such  a  polic\-  could  read  — 


FORMS  OF  EXTENDED  AREA  33J 


"  On  merchandise,  cliietly own,  or  held  bv An  Execs 

in  trust  or  on  commission,  or  on  joint  account   with  others,  or   Floater 
sold  but  not  removed,  and  not  under  the  protection  of  a  Ma-   Form. 
rine  Policy,  while  contained  in  all  or  any  of  the  brick  or  stone 
storage  warehouses,  and  while  in  ti'ansit  in  or  on  any  of  the 

streets,  depots,  yards  or  wharves  in  the  Citv  of ,  and  in 

any  ship  or  vessel  in  the  port  of  said  city,  subject  to  the  follow- 
ing conditions  :  — 

Reduced  Rate  Average  Clause. 

In  consideration  of  the  reduced  rate  at  which  this  policy  is 
written,  it  is  expressly  stipulated  and  made  a  condition  of  this 
contract  that  this  company  shall  be  liable  for  no  greater  propor- 
tion of  any  loss  than  the  amount  hereby  insured  bears  to  the 
actual  cash  value  of  the  pi^operty  described  herein  at  the  time 
when  such  loss  shall  happen,  nor  for  more  than  the  propor- 
tion which  this  policy  bears  to  the  total  insurance  thereon. 

If  this  policy  be  divided  into  two  or  more  items,  the  fore- 
going conditions  shall  apply  to  each  item  separately  :  and  if 
two  or  more  buildings  or  their  contents  be  included  in  a  single 
item,  the  application  of  the  provision  as  to  special  inventory 
or  appraisement  shall  lie  limited  to  each  building  and  its 
contents. 

Exception  Clatise. 

It  is  understood  and  agreed  that  goods  on  which  the  in- 
sured have  a  specific  insurance  are  not  covered  by  this  policy 
except  so  far  only  as  relates  to  any  excess  of  value  above  such 
specific  insurance,  and  that  this  policy  shall  be  liable  only  for 
its  proportion  of  any  loss,  on  such  property,  which  exceeds 
such  specific  insurance." 

Then  follow  paragraphs  excluding  certain  extra  hazardous  pro- 
perties and  locations.  Vou  will  note  that  the  Exception  Clause  de- 
fines clearly  the  excess  feature  we  have  commented  on. 


V 

FIRE  INSURANCE  CLAUSES 

Clauses  of  Permission. 

Any  form  of  standard  policy  sets  forth  certain  conditions  under 

-  which   the   poHcy   contract    will    be    voided.      Some    of    these,   as 

already  explained,  are  conditions  that  could  not  rightfullj-  be  waived, 

while  there  are  others  which,  if  the  insurer  sees  fit  to  do  so,  mav 

for  sufficient  reason  be  set  aside,  or,  that  is,  waived. 

Authority  to  waive  these  standard  provisions  is,  of  necessity, 
vested  in  all  the  local  or  commissioned  agents  of  the  fire  insurance 
companies,  unless  restrictions  have  been  placed  upon  their  authority 
and  are  inserted  in  cither  the  application  for  insurance  or  in  the 
policy  itself,  or  in  some  other  manner  ha\  e  been  made  known  to 
the  insured.  If  this  condition  is  not  made  clearly  apparent  it  is 
necessarily  assumed  that  the  commissioned  agents  have  the  neces- 
sary power  to  waive  conditions  and  forfeitures,  and  to  estop  the 
company  without  further  written  permission  to  do  so.  This  con- 
clusion is  mainly  based  on  the  extent  of  the  actual  authority  vested 
in  such  agents,  commissions  of  authority  ordinarily  empowering 
them  to  perform  such  acts  as  the  accepting  or  the  rejecting  of  pro- 
posals for  insurance,  the  countersigning,  delivering,  renewing  or 
cancelling  of  policies,  the  granting  of  necessary  permits,  and  in 
some  cases  even  the  fixing  of  the  premium  rate. 
"Waiver and  ^^  order  that  these  rights  of  waiv^er  and  estoppel  are  clearly 

Estoppel.  understood,  let  us  seek  to  define  them.  Waiver  is  the  voluntary 
relinquib.hment  or  gi\ing  up  of  some  known  right.  Estoppel  is  the 
bar  which  is  \'ested  in  equity  in  the  interests  of  fair  dealing,  to  pre- 
^  ent  one  party  from  enforcing  to  the  disadvantage  of  the  other 
certain  rights  which  it  appears  to  possess  under  the  letter  of  the 
contract.  When  liy  its  declarations,  agreement  or  conduct,  it  has 
induced  the  other  party  to  believe  that  such  rights  have  been  re- 
linquished, then  an  estoppel  raises  what  we  have  termed  the  I'lar, 
to  prevent  the  rights  of  the  party  who  would  otherwise  suffer  from 
being  encroached  upon.  Wai\er  being  the  voluntary  abandonment 
of  a  right,  estoppel  can  only  include  such  cases  where  an  abandon- 


FIRE  INSURANCE  CLAUSES  333 

ment  is  inferred  or  imposed  by  the  Court  from  the  nature  of  the 
conduct  of  the  party  who  would  otherwise  be  entitled  to  the  ri^ht. 
Wai\er  rests  upon  knowledge  of  the  right  and  an  intention  to 
abandon  it  by,  in  the  case  of  an  insurance  policy,  the  party  issuing 
the  contract,  that  is  the  insurer.  Estoppel  rests  upon  misleading 
conduct  by  one  party  to  the  prejudice  of  the  other,  and  is  forced 
upon  the  would  be  wrongdoer  by  the  Court  in  order  to  preyent 
fraud,   either  actual   or  constructed. 

In  studying  "  Clauses  of  Permission"  it  is  more  important  for 
us  to  consider  the  intent  and  the  rights  granted  by  waiyers  rather 
than  to  giye  attention  to  what  might  constitute  an  estoppel. 

The    mere  fact    of    nothing  being  said    by  a    company    after  Silence  by 
knowledge  of  a  forfeiture  of  the  policy  by  the  assured,  or  the  com- Insurer  not 

mission  of  some  act  that  would  appear  to  create  a  yoidance  of  the  "^'-^^^^'^^  ^ 

,•  -n        .-     •  1  I  •  T^i     ..  •         •         voidance  of 

policy,   \yill  not,  m  general,  operate  as  a  waiyer.      1  hat  is,  since,.     .  , 

the  company  has  not  contracted  to  search  out  the  insin-ed  under  its 
policies  and  adyise  them  as  to  the  legal  effect  of  the  policy  pro- 
yisions,  the  fact  that  they  haye  not  adyised  the  insured  of  the  way 
in  which  they  regard  the  consequences  of  his  act,  would  not  con- 
stitute a  waiyer  of  their  rights  resulting  from  a  voidance  of  the 
policy  by  the  ^  iolation  of  some  one  or  more  of  its  proyisions  by  the 
assured.  We  speak  of  this  because,  at  times,  the  claim  is  made, 
where  a  loss  occurs  under  a  policy  owing  to  the  introduction  of 
some  extra  hazardous  material  or  process  into  the  property  coyered, 
that  the  company  or  its  representative  neyer  told  the  assured  that 
they  must  not  create  this  condition  of  extra  hazard,  and  that  since 
nothing  was  said  about  it,  the  assured  inferred  that  he  had  a  perfect 
right  to  do  as  he  pleased.  In  a  case  like  this,  the  fact  that  the 
company  had  gi\en  no  ad^•ice  does  not  constitute  a  wai\er  of  the 
rights  and  safeguards  that  were  granted  it  (the  insuring  company) 
under  the  provisions  of  the  policy. 

It    is    interesting    in  this  connection  to  consider  whether  the  Does  a  Void- 
temporary  yoidance  of  a  policy,  owing  to  the  insured  party  haying  ance  Per- 
committed   some  act  expressly   prohibited    in   the   policy  contract,  "lanently 

kills  the  policy.      This  is  a  question  that  has  been  sidiiect  to  con- _,  ^ 

.,,,,.•  .,...,  •'  Contract? 

siderable  dispute,   it  being  maintained   in  some   cases  that  if,  for 

example,  by  the  introduction  of  some  extra  hazardous  and  pro- 
hibited material  or  process  into  a  propert\-,  the  policy  conditions 
were  yiohited  and  the  contract  voided,  whether,  if  this  hazardous 
material  or  process  was  later  on  removed  from  the  building,  the 
policy  automatically  again  became  operative,  that  is,  was  revived 


334 


LECTURES  ON  FIRE  INSURANCE 


and  made  a  live  contract.  I  do  not  Hnd  that  there  has  ever  been 
any  definite  ruling  on  this  point  that  would  go\ern  all  cases.  Ap- 
parently, if  the  insurers  recognized  the  policv  after  such  an  act  of 
-soidance,  as  lieing  a  live  contract,  would  make  it  so.  In  any 
event  it  seems  to  have  been  regarded  as  a  \  erv  inadequate  defense 
for  a  company  to  set  up  that  the  policy  was  void  because  there  was 
on  the  premises,  for  illustration,  some  prohibited  article  stored 
prior  to  the  fire  that  may  ha\e  created  a  claim,  even  though  the 
origin  of  the  fire  may  have  been  wholly  foreign  to  the  existence  of 
the  prohibited  article.  Evidence  of  knowledge  on  the  part  of  the 
insuring  company  of  the  presence  of  these  prohibitive  conditions  is 
the  fe.iture  that  must  mainly  determine  the  final  ruling.  If,  know- 
ing the  increase  of  hazard,  they  allowed  the  policv  to  continue  and 
took  no  steps  to  cancel  the  contract,  it  is  only  fair  to  assume  that 
such  contract  is  still  in  force. 

We  have  spoken  in  this  geneial  manner  of  wai\ers,  in  order 
to  direct  the  view  that  you  will  be  called  on  to  take  of  them  in 
connection  with  clauses  that  permit  the  setting  aside  of  any  of  the 
standard  policy  provisions. 
Certain  You  have  already  been  told  that  there  are  certain  clauses  that 

Policy  Pro-  cannot  be  waived.  Parties  to  a  contract  of  insurance  within  a  cer- 
tain state  cannot  waive  the  provisions  of  a  general  statute  of  that 
state  unless  the  statute  authorizes  their  doing  so.  For  example, 
the  rule  requiring  an  insurable  interest  as  one  of  the  conditions  of 
the  fire  insurance  contract,  whether  it  is  prescribed  by  a  special 
statute  or  not,  being  adopted  out  of  regard  for  the  welfare  of  the 
state,  may  not  be  waived  by  the  parties  to  the  insurance  contract. 
A  corporation  cannot  do  an  act  that  is  beyond  the  corporate  powers 
vested  in  it  by  its  charter,  and  every  one  dealing  with  the  corpora- 
tion is  assumed  to  be  aware  of  the  nature  and  extent  of  such  power. 
If  a  fire  insurance  company  organized  in  Massachusetts  to  do  a  fire 
business,  should  attempt  to  make  a  contract  in  life  or  ocean  marine 
insiuance,  the  contract  would  be  \oid  because  the  company  was  at- 
tempting to  do  something  that  implied  the  existence  of  rights  and 
powers  not  vested  in  it  by  its  Massachusetts  charter.  There  are 
other  features  of  the  fire  insurance  policy  which  cannot  be  waived, 
but  our  attention  must  be  directed  more  particularlv  to  those  that  can, 
since  it  is  to  this  latter  class  of  conditions  that  Clauses  of  Permis- 
sion especially  apply.  We  have  called  attention  to  these  provisions 
that  cannot  be  set  aside  by  wai\  er  in  order  to  cause  you  to  think  of 
the  rights  that  may,  or  may  not,  exist  when  vou  are  considering 


visions  Can 
not  be 
Waived 


FIRE  INSURANCE  CLAUSES  335 


the  setting  iiside  of  any  of    the  polic\'   coinhtions,   rather    than   to 

give  definite  instruction. 

What    can    he    waived?      Any    condition   or   proxision  of  tlie    What  Policy 

policy  tliat  is  inserted  for  tlie  benefit  of  tlie  insuring  company,  even    Provisions 

stipuhitions  which  appear  to  proyide  tliat  there  shall  be  no  waiver,    __  ,     , 
•  •  -1  waived, 

or  that  no  waiver  shall  be  made  except  in  a  special  manner,  as  bv 

writing,  or  that  certain  classes  of  persons  shall  be  deemed  to  have 

no  authority  to  waive,  may  be  waived  by  the  insurers  through  such 

representatives  of  theirs  as  have  the  requisite  authority.     This  may 

seem  strange  and  somewhat  one  sided,  but  it  is   rightfully  assumed 

and  granted  that  the  party  who  has  the  right  to  make  a  contract 

should  also  have  the  power  to  alter  it  to  any  extent  they  may  wish 

unless    restricted  l)y  statute,    provided  the  insured  party  approves 

and  accepts. 

Since  under  these  conditions  the  rights  that  are  waived  are  all 
of  them  set  aside  for  the  benefit  of  the  insured  party,  objection  on 
his  part  is  a  very  remote  condition. 

The  fact  that  by  the  attachment  of  Permissible  Clauses  rights 
that  would  otherwise  exist  for  the  benefit  of  one  party  or  the  other 
can  be  waived,  carries  with  it  the  importance  of  the  insured  party 
knowing  exactly  what  there  is  in  these  waivers  of  certain  features 
of  the  policy  contract.  It  is  not  only  essential  for  the  safeguarding 
of  the  insured  that  he  should  see  to  it  that  the  standard  form  of 
policy  used  is  the  correct  and  duly  authorized  one,  and  that  the 
description  of  his  property  is  clear  and  unmistakable,  but  he  should 
also  scrutinize  most  closely  the  clauses  that  may  be  attached,  espec- 
ially those  constituting  waivers,  for  while  the  majority  of  such 
clauses  tend  to  remove  rights  more  directly  beneficial  to  the  insurer, 
there  are  those  that  often  are  used  that  may  take  away  or  materially 
reduce  his  own  rights. 

What  provisions  of  the  standard  policy  contract,  then,  do 
Clauses  of  Permission  especially  affect?  You  will  agree,  I  am 
sure,  that  they  apply  particularly  to  what  are  termed  the  Voidance 
Clauses,  that  is,  those  conditions  under  which  the  standard  contract 
states  "  That  this  entire  policy  shall  be  void  if,"  and  then  follow  a 
number  of  defined  conditions. 

The  New  York  and  the  Massachusetts  standard  policies,  in  the 
main,  agree  as  to  just  what  these  voidances  are,  and  the  comments 
that  we  purpose  making  on  them  are  applicable  to  either  form  of 
policy,  excepting  in  the  one  or  two  instances  to  which  we  purpose 
callins  attention. 


336 


LECTURES  ON  FIRE  INSURANCE 


Withholding 
of  Material 
Facts. 


Concealment 
or  Misrepre- 
sentation. 


Other  In- 
surance. 


You  will  note  that  the  Massachusetts  standard  form  states  that 
this  policy  shall  1)e  void  "If  any  material  fact  or  circumstance, 
stated  in  writint^-,  has  not  been  fairly  represented  by  the  assured." 
It  hardly  seems  possible  that  any  underwriter  would  desire  to 
wai^e  any  of  the  conditions  of  this  provision.  Doubtless,  an 
underwriter  would  not,  but  unfortunately,  many  of  the  assured, 
and  some  brokers,  have  sought  to  set  aside  the  safeguard  imposed 
on  the  ground  that  unintentionally,  and  in  a  most  innocent  manner, 
an  ignorant  assured  might  misrepresent  in  taking  out  his  insurance 
and  thereby  void  his  claim  in  the  e\ent  of  a  loss  occurring.  It  is 
\  ery  interesting  to  note  in  this  connection  that  it  is  not  the  ignoi-ant 
assured  that  raises  this  issue,  or  that  seems  to  desire  to  have  the 
effect  of  their  ignorance  diverted  from  them  in  the  manner  sug- 
gested, but  it  is  always  a  suggestion  of  those  who  not  only  are  far 
from  ignorant,  but  who  would  greatly  resent  any  imputation  that 
they  were.  It  is  hard  to  understand  how  the  pul)lic  statutes  of  any 
state  could  seek  to  waive  this  provision,  since  by  so  doing  they 
virtually  compound  a  possible  felony  and  are  legalizing  what  would 
ofien  prove  a  fraud,  liut  it  is  a  fact  that  one  of  the  Southern  states 
has  especially  provided  that  under  certain  conditions  the  companies 
waive  their  rights  to  claim  forfeitures  on  account  of  misrepresenta- 
tion of  facts  at  the  time  the  insurance  was  taken  out. 

The  New  York  form  of  policy  is  very  much  more  explicit  in 
its  reference  to  this  feature,  and  states  that  the  entire  policy  shall  be 
void  "if  the  insured  has  concealed  or  misrepresented  in  writing  or 
otherwise  any  material  fact  or  circumstance  concerning  this  insur- 
ance or  the  subject  thereof,  or  if  the  interest  of  the  insured  in  the 
property  be  not  truly  stated  therein.  Or,  in  case  of  any  fraud  or 
false  swearing  by  the  insured  touching  any  matter  relating  to  this 
insurance  or  the  subject  thereof,  whether  before  or  after  a  loss." 
It  certainly  would  seem  as  if  this  description  as  to  what  will  con- 
stitute a  voidance  was  so  clear  as  to  admit  of  no  possible  doubt. 
So  much  latitude,  though,  has  been  given  by  the  Courts  in  their 
interpretation  of  this  provision  that,  unfortunately,  it  has  to  a  large 
extent  become  a  dead  letter. 

There  can  be  no  question  but  w  hat  any  clause  or  rider  attached 
to  a  policy  that  would  in  any  degree  limit  the  conditions  of  this 
provision,  would  be  most  unwise  and  wholly  uncalled  for,  and 
should  be  rigidly  objected  to. 

The  next  of  the  voidance  clauses  is  "  Or,  if  the  assured  now 
has  or  shall  hereafter  make  any  other  insurance  on  the  said  pro- 


FIRE    INSURANCE    CLAUSES  337 


perty  without  the  assent  in  writing-  or  in  print  of  the  company." 
The  \oidance  of  this  provision,  which  in  its  intent  is  a  perfectly 
proper  and  wise  one,  but  which,  however,  may  be  rightfully 
waived,  is  accomplished  by  the  simple  insertion  of  the  words  under 
the  description  of  the  property  "  other  insurance  permitted."  The 
reason  for  the  insertion  of  this  clause  in  the  standard  policy  is  that 
it  establishes  a  check  to  the  over  insurance  of  the  propert}',  and  it, 
doubtless,  was  inserted  by  law  makers  who  reahzed  the  tendency 
of  the  average  jury  to  be  over  liberal  in  the  estimate  of  the  amount 
and  value  of  properties.  The  presence  of  this  clause  calls  attention 
to  this  condition,  and  if  the  company  feels  that  the  amount  of  its 
own  policy  is  sufhcient  with  respect  to  the  value  of  the  property, 
it  reserves  to  them  the  right  to  refuse  to  attach  the  "  other  insur- 
ance permitted"  clause,  which  would  grant  practically  an  unlimited 
amount.  Doubtless,  too,  this  provision  to  a  certain  extent  reduces 
the  temptation  to  bring  about  an  opportune  fire  that  might  present 
itself  to  the  unscrupulous  insured. 

The  policy  will  be  void  '•  if  without   consent  of  the  *^ompany  j^^i^Qval  of 
the  property  insured  shall  be  removed,  except  that  if  such  removallnsured 
shall  be  necessarv  for  the  preservation  of  the  property  from  fire,  P'''^P^'"*y- 
this  policy  shall   be  valid  without   such  assent  for  fi\e  davs  there- 
after."    Since  the  average  insurance  policy  insures  a  certain  party 
against  loss  or  damage  to  a  certain   specified  thing  in  a  certain  de- 
fined place,   removal  of  the   insured  property  woidd  \irtu:dly  call 
for  the  issuing  of  an  entirely  new  contract,  or  the  reformation  of 
the  policy  bv  endorsement  permitting  the  removal.      If  any  waiver 
of  this  feature  of  the  policy  is  granted,  it  is  usually  in  the  nature  of 
a  floating  form  which  contemplates  insuring  the  property   in  any 
loc.ition  within   certain   more  or   less  widely  defined   limits,   such 
conditions  as  we  considered  untler  tourists'  and  caniers'  policies. 

''Or,  if  without  consent  of  the  company  the  situation  or  cir-An  Increase 
cumstances  affecting  the  risk  shall  by  or  with  the  knowledge,  of  Risk, 
advice,  agency  or  consent  of  the  insured,  be  so  altered  as  to  cause 
an  increase  of  such  risks."  The  New  York  form  sums  up  the 
situation  by  also  inserting  the  words,  '"  Or,  if  the  hazard  be  in- 
creased by  any  means  within  the  control  or  knowledge  of  the 
insured."  But  the  whole  object  of  either  the  Massachusetts  or 
the  New  York  provision  is  to  pre\ent  changes  being  created  by  the 
insured  in  his  propert\  that  may  constitute  an  increase  of  hazard, 
without  the  insuring  company  being  advised  thereof  and  given 
opportunity  to  withdraw.      There  are  a  nimiber  of  Clauses  of  Per- 


338 


LECTURES  ON  FIRE  INSURANCE 


mission  designed  to  meet  tlie  conditions  of  this  policy  provision, 
such  as  permission  to  effect  other  than  ordinary  aherations  or 
repairs,  builder's  risk  permits,  mechanic's  permits,  and  in  fact,  the 
number  of  special  provisions  for  conditions  out  of  the  ordinar\-  that 
may  be  allowed  by  Clauses  of  Permission,  designed  to  offset  this 
especial  safeguarding  feature  of  the  policy,  are  many  and  varied. 
Sold  or  As-  Passing  on  in  the  list  of  conditions  that  void  the  policy,  we  find 

signed.  ti^e  Massachusetts  form  states  that  the  policy  shall  be  \oid  "if  the 

propert}'  covered  shall  be  sold  or  the  policy  assigned."  It  hardly 
seems  necessary  to  comment  on  this  pro\ision  when  we  remember 
that  it  is  people,  not  things,  that  we  insure  ;  and  if  a  certain  property, 
against  the  loss  of  which  an  insurance  company  has  agreed  to  in- 
demnify the  insured  party,  ceases  to  belong  to  that  party,  the  con- 
tract must  at  once  become  invalid,  and  the  only  way  to  recognize 
that  the  insurance  taken  out  shall  follow  the  property,  will  be  by 
the  attachment  of  an  endorsement  to  the  policy  admitting  of  change 
in  ownership.  A  clause  granting  this  privilege  is,  perhaps,  more 
properly  one  of  title  than  of  permission,  though  it  is  true  that  per- 
mission is  granted  by  the  endorsement  for  a  change  in  the  party 
protected  thereby. 
The  Aliena-  '^'be  New  York  policy  is  even  more  explicit,  and  defines  that 

tion  Qause.  the  policy  shall  be  void  unless  the  interest  of  the  insured  is  that  of 
"  sole  and  vmconditional  ownership."  Also  the  New  \'()rk  policy 
embodies  what  is  termed  the  Alienation  Clause,  which  states  that 
the  policy  shall  be  void  *•'  if  any  change  other  than  by  the  death  of 
an  insured  takes  place  in  the  interest,  title  or  possession  of  the  sub- 
ject of  insurance  (except  change  of  occupants  without  increase  of 
hazard),  whether  by  legal  process  or  judgment,  <>r  In  xoluntarv 
act  of  the  insured,  or  otherwise."  The  pro\  ision  embraced  in  this 
clause  is  of  the  highest  importance  to  the  insuring  company,  but  at 
the  same  time  it  fiu'nishes  a  fretjuent  cause  of  misunderstanding  to 
an  ignorant  or  careless  assured.  The  insurance  companies  certainly 
ha^  e  the  right  to  know  who  they  are  contracting  with,  and  it  \\  oidd 
be  u  holly  wrong  if  any  new  party  could  be  introduced  in  the  con- 
tract without  their  consent.  Nor,  you  will  note,  under  the  Aliena- 
tion Clause  can  the  insin^ed  alter  the  risk. 

The  Massachusetts  standard  policy  being  much  less  explicit 
regarding  tiiis  feature,  does  not  recjuire,  as  a  rule,  any  clause  or 
provision  bearing  upon  it,  other  than  that  which  may  form  a  part 
of  the  ordinary  endorsement  relative  to  change  in  ownership  or 
occupancy. 


FIRE    INSURANCE    CLAUSES  339 

The  same  restrictions  apply  to  the  assignment  of  the  policy, 
and  such  assignments  are,  as  yuu  know,  effected  by  an  endorsement 
that  must  be  assented  to  by  the  insuring  company  in  order  to  con- 
tinue the  policy  contract  in  force.  This  is  another  outcome  of  the 
personal  indemnity  feature  of  the  insurance  contract,  and  in\olves 
the  uni\-ersal  principle  that  no  new  party  can  pose  as  an  assured 
luider  an  insurance  policy  without  the  consent  of  the  insurer. 

The  next  voidance  condition  is  that  of  vacancy,  the  standard  Vacancy- 
form  stating  that  the  policy  will  be  \()id  ''  if  the  premises  hereby  ^^°^ 
insured  shall  become  vacant  by  the  remo\  al  of  the  owner  or  occupant, 
and  shall  remain  \  acant  for  more  than  thirty  da3's  after  such  assent." 
The  New  York  form  is  a  little  more  explicit  in  this,  using  the  words 
"vacant  or  unoccupied,"  instead  of  simply  the  word  '■'■vacant." 
Furthermore,  the  terni  limit  is  reduced  to  ten  days  under  the  New 
York  standard  form.  The  reason  for  the  addition  of  this  word 
"■  unoccupied"  is  to  gi\e  the  restriction  a  broader  effect  in  order  to 
more  thoroughly  safeguard  the  insuring  company.  Technicalities 
in  interpretation  ha\e  so  crept  into  the  decisions  rendered  on  insur- 
ance contracts  that  it  has  often  been  held  that  a  building  was  not 
\  acant  so  long  as  there  was  any  air  in  it.  We  may  say  that  this  is 
absurd,  but  at  the  same  time  it  is  a  fact,  and  I  ha\e  before  me  a  list 
of  upwards  of  twenty  decisions  that  practically  sustain  that  inter- 
pretation. Why  unoccupancy  should  not  call  for  an  equal  applica- 
tion of  the  saving  grace  of  common  sense  in  its  interpretation,  I 
cannot  say,  but  it  does  not  seem  to  ha\e  been  subject  to  quite  the 
same  amount  of  foolishness  as  the  interpretation  of  the  w'ord  "■  vacant." 
The  reason  we  speak  of  this  condition  is  because  so-called  Vacancy 
Clauses  are  ones  of  great  importance  and  distinctly  come  under  the 
same  class  that  we  are  now  considering,  namely,  Clauses  of  Per- 
mission. In  order  to  properly  draft  and  apply  these  clauses  it  must 
be  essential  for  us  to  know  what  constitutes  vacancy  or  unoccu- 
pancy. In  the  case  of  a  dwelling,  it  would  meet  all  the  requirements 
of  the  policy  provision  if  someone  is  hal^itually  living  and  sleeping 
there,  even  though  he  was  not  constantly  on  the  premises.  On  the 
other  hand  it  has  been  held  and  sustained  that  to  constitute  an 
occupied  dwelling  house  it  was  not  essential  that  it  be  the  sleeping- 
place  of  some  party,  and  that  presence  in  the  dwelling  of  anyone  at 
more  or  less  irregular  intervals,  and  for  even  very  brief  periods  of 
time,  so  long  as  they  were  present  at  periods  within  the  term  of 
limitation,  would  constitute  an  occupancy  that  would  render  the 
vacancy  permit  unnecessary,      "^'ou  will  note  tiiat  in  the  Massachu- 


340 


LECTURES  ON  FIRE  INSURANCE 


Operating 
Overtime. 


setts  form  the  mention  of  vacancy  is  followed  by  the  words  "  bv  the 
remo\aI  of  the  owner  or  occupant,"  and  the  insertion  of  this  word 
''remo\al"  seems  to  still  further  complicate  tlie  situation,  for  in  a 
neighboring  state  where  the  Standard  policy  has  a  clause  almost 
precisely  like  that  in  the  Massachusetts  form,  the  occupant  of  a 
house  on  account  of  the  state  of  her  health  left  her  home  unoccupied 
for  a  period  of  three  months,  taking  with  her  only  her  clothing. 
She  left  with  the  understanding  that  someone  was  to  \isit  the  prem- 
ises in  the  daytime  at  least  twice  a  week.  A  fire  occurred  and  the 
admission  of  the  claim  being  the  subject  of  controversy  the  Court 
held  that  there  is  a  difference  in  meaning  between  ''absence"  and 
"  remo\al,"  and  left  it  to  the  jury  to  say  whether  the  house  was 
"  \acant  b}-  remo\al." 

With  these  somewhat  conflicting  opinions  as  to  just  what  the 
Vacancy  Clauses  in  the  standanl  policies  do  really  mean,  it  is  some- 
what diflicult  to  determine  just  how  a  clause  should  be  worded  that 
will  permit  further  vacancy  or  unoccupanc\'  than  that  allowed  by 
the  policy,  and  at  the  same  time  properly  safeguard  the  interests  of 
the  insuring  company.  The  tendency  seems  to  be  growing  for  the 
insured  to  place  himself  on  the  safe  side  hx  the  adoption  of  the  so- 
called  I'nlimited  Vacancy  Permit.  There  can  be  no  question  but 
what  permission  of  this  kind  is  allo^vable  if  the  company  sees  fit  to 
grant  it,  but  it  often  results  in  the  occurrence  of  losses  that  are  a 
great  surprise  U)  the  company  that  finds  itself  paying  a  claim  on 
what  may  have  been  for  some  time  past  a  practically  abandoned 
property. 

Coupled  with  this  provision  of  voidance  in  the  Massachusetts 
policy  is  the  statement  that  if  the  subject  of  the  insui'ance  "be  a 
manufacturing  establishment  running  in  whole  or  in  part  extra 
time,  except  that  such  establishment  may  run  in  whole  or  in 
part  extra  hours,  not  later  than  nine  o'clock  p.  m.,  or  if  such  estab- 
lishments shall  cease  operation  for  more  than  thiity  days  without 
permission  in  writing  endorsed  hereon."  Clauses  granting  per- 
mission for  both  the  overtime  and  the  cease  operation  feature,  are 
perfectly  admis-iible  if  the  company  elect  to  grant  them,  ami  the 
clauses  that  are  ordinarily  in  use  to  meet  this  need  are  both  regular 
and  generally  acceptable.  It  is  questioned,  sometimes,  as  to 
whether  there  is  any  increase  in  hazard  or  not,  when  a  manufac- 
turing establishment  is  running  nights,  or  when  it  is  entirel\-  shut 
down  for  a  more  or  less  extended  period.  Experience  has  shown 
that  hazard  does  increase,  owing  to  various  physical  causes,  such 


FIRE  INSURANCE  CLAUSES  341 

as  over-heated  bearings,  the  presence  of  fewer  operatives,  and  the 
consequent  delay  in  the  detection  of  a  fire  ;  and  in  the  cease  opera- 
tion case,  the  possible  introduction  of  moral  hazard  and  the  less 
close  supervision  that  a  property  of  this  character  naturally  obtains. 
This  calls  for  the  attachment  to  the  clause  of  a  guarantee  as  to 
care  and  supervision  —  a  guarantee  which,  though  necessary,  often 
proves  ineffectual. 

It  is  somewhat  surprising  that  in  the  arrangement  of  the  \'oid-  Attempt  to 
ance  conditions  in  the  Massachusetts  policy,  there  is  interjected  Defraud, 
between  the  permit  to  cease  operations  and  the  prohiliition  as  to 
the  keeping  of  certain  extra  hazardous  articles,  a  proviso  stating 
that  the  policy  should  be  ^  oid  "  if  the  insured  shall  make  any 
attempt  to  defraud  the  companv,  either  before  or  after  the  loss." 
It  would  seem  as  if  that  proviso  should  have  been  made  at  the 
outset,  or  if  brought  in,  in  connection  with  any  of  the  other 
voidances,  that  it  should  have  accompanied  the  first  of  the  men- 
tioned \oidances  ;  namely,  that  of  misrepresentation.  The  framing 
of  a  clause  to  exempt  the  assured  from  the  voidance  of  his  policy 
if  he  has  been  guilty  of  fraud  in  connection  therewith,  is  some- 
thing that  we,  fortunately,  in  this  part  of  the  country  do  not 
have  to  consider,  but  the  way  that  insurance  legislation  has  been 
going  in  some  of  our  Western  and  Southern  states,  it  is  not  unlikely 
that  fraud  may,  when  perpetrated  in  connection  with  a  fire  insur- 
ance policv,  be  ele\'ated  from  the  ranks  of  crime  to  those  of  virtue. 

Probably  the  most  important  of  all  of  the  clauses,  and  the  ones  Dangerous 
that  are  called  the  most  frequently  into  use  are  those  that  are  Material, 
drafted  to  meet  the  last  of  the  requirements  of  this  portion  of  the 
Massachusetts  policy.  Those  that  state  that  the  policv  shall  be 
void  if  gunpowder  or  certain  other  hazardous  articles  mentioned 
are  kept  in  any  manner  deviating  from  that  allowed  or  prescribed 
by  law,  or  that  if  certain  volatile  products  grouped  usually  under 
the  general  name  of  "gasolene,"  shall  be  kept  on  the  premises 
insured. 

The  enormous  increase  in  the  use  of  the  so-called  volatile  pro- 
ducts has  necessitated  the  almost  constant  attachment  of  clauses 
permitting  some  one  or  the  other  of  them  to  be  kept  and  used  under 
constantly  varying  conditions.  The  New  York  form  of  policy,  in 
some  ways,  is  more  satisfactory  in  dealing  with  this  question  than 
is  that  of  Massachusetts,  for  it  does  not  recognize  the  fact  as  avert- 
ing a  voidance,  that  usage  or  custom  of  trade  in  connection  with 
the  business  carried  on  in  insured  premises  will  waive  the  provision 


342  LECTURES  ON  FIRE  INSURANCE 

of  the  policy,  which  states  that  such  policy  shall  be  \  oid  if  these 
hazardous  materials  are  kept.  This  renders  it  seemino;ly  more 
necessary  to  have  the  Clause  of  Permission  that  grants  the  keeping 
or  using  of  these  so-called  gasolene  products  much  more  clearly 
defined  when  used  with  the  New  York  policy  than  with  that  of 
Massachusetts,  though  I  do  not  find  that  there  is  any  material 
difference  in  the  phraseology  of  the  forms  currently  u^ed  under 
each  of  these  policies. 

The  increasing  use  of  automobiles  has  introduced  another 
feature  of  this  gasolene  hazard,  and  one  that  is,  nowadays,  ever 
with  VIS.  This  has  resulted  in  the  combining  in  one  clause  of  the 
permission  to  keep,  under  certain  conditions,  gasolene  products  and 
to  permit  also  the  presence  of  the  automobile  in  connection  with 
which  they  are  used.  This  gasolene  feature  raises  the  somewhat 
interesting  question  as  to  whether,  in  the  written  description  of  a 
property,  the  mention  of  the  presence  of  these  extra  hazardous 
materials  will,  by  itself,  waive  the  policy  provision  prohibiting 
them,  or  whether  it  is  not  necessary  to  have  a  distinct  clause  calling 
attention  to  the  presence  of  these  dangerous  substances  and  pre- 
scribing the  conditions  under  which  they  may  be  kept  in  the  in- 
sured premises.  Sometimes  the  Courts  have  held  that  wherever 
these  prohibited  articles  might  naturally  or  usually  belong  to  a 
stock  of  goods  or  other  subject  matter  insured,  that  it  is  not  neces- 
sary to  further  grant  permit  for  their  use,  but  such  decisions  are 
by  no  means  absolute  or  unexceptional,  and  the  only  safe  course 
to  pursue  is  to  attach  the  regular  Clause  of  Permission  that  will 
meet  the  special  condition  of  the  case. 
Damage  by  ^^'*  mention  is  made  in  the  Massachusetts  form  as  to  the  atti- 

Lightning.  tude  of  the  standard  policy  with  respect  to  loss  by  lightning,  lea\- 
ing  it,  therefore,  to  be  ihstinctly  assumed  that  fire  resulting  from 
lightning  is  covered  bv  the  policy.  This  would  except  the  damage 
that  might  be  caused  bv  lightning,  other  than  that  which  might 
come  from  a  resulting  fire.  The  New  York  form  of  policy  places 
this  question  beyond  doubt,  and  states  that  '"  liability  for  direct 
damage  by  lightning  may  be  assumed  by  specific  agreement  here- 
on." It  is  this  proviso  that  has  given  rise  to  the  use  t)f  the  so-called 
Lightning  Clause,  which  is  not,  as  so  many  people  seem  to  think, 
necessary  to  enable  them  to  collect  for  the  fire  damage  that  may 
result  from  a  stroke  of  lightning,  but  it  also  causes  the  policy  to 
cover  the  wreckage,  or  water  damage,  that  may  result  from  a 
liilhtnin'';  stroke  in  cases   where   a    fire  does  not  ensue. 


FIRE  INSURANCE  CLAUSES  343 


There    are  certain  special   conditions   brought    into    the  New  Special 
York   policy  that,  while  their  recognition  may  call  for  the  use  ofVoidance 
Permissive  Clauses,  are  still  ones  that  can,  perhaps,  be  more  prop- Conditions, 
erly  considered  under  the  topic  of  "Clauses  to  meet  Special  Con- 
ditions,"   than    for    us    to    dwell  on  them   here.      I  refer  to  those 
exemptions  from  liability  for  loss  that  may  be  caused  by  invasion, 
insurrection,    riot,   ci\il   war,  military  or  usurped  power,   neglect, 
explosion,  fallen  buildings,  and  in  some  of  our  states,  earthquake. 
Permissive  clauses  to  recognize  hazards  resulting  from  such  sources 
are,  in  the  case  of  some  of  these  causes,  at  least  admissible  and  will 
be  the  subject  for  consideration  later  on. 

Another  of  the  special  conditions  that  the  New  York  policy  Leased  Land, 
recognizes  as  constituting  voidance,  which  Massachusetts  over- 
looks, although  it  is  one  of  the  points  that  the  careful  underwriter 
always  considers,  is  that  of  the  leased  land  feature  in  cases  where 
the  subject  of  insurance  stands  upon  land  held  in  that  manner. 
The  New  York  policy  distinctly  states  that  the  policy  will  be 
void  "if  the  subject  of  the  insurance  be  a  building  on  ground  not 
owned  by  the  insured."  Massachusetts,  doubtless,  regards  the 
withholding  oi  information  of  this  sort  as  being  one  of  the 
material  facts  that  should  be  presented  at  the  time  the  insurance 
was  applied  for.  but  it  is  a  good  plan  to  have  attention  especially 
called  to  it  in  the  manner  that  the  New  York  form  of  policy  does. 
The  clause  safeguarding  the  assured  in  the  event  of  a  condition 
of  this  sort,  while  it  is  a  Permissive  Clause,  is  usually  incor- 
porated directly  with  the  form  of  property  description,  and  states, 
after  defining  the  property,  that  it  is  situated  on  leased  land, 
located  so  and  so. 

So  much   for  the  conditions   that   arise   under  the   two   mo^t Standard 
widely  used  forms  of  standard  policy  that  call   for  the  attachment  Clauses  Es- 
of  Permissive  Clauses.      As   to   the  phraseology  of  such    clauses,  scntial  to 
it  seems  to  me,  those  that  are  prescribed  by   the   National   Board    ^^*^* 
give  us  as  desirable  standards  to  work   from  as  any,  and  uniform- 
ity   in    this    respect    is   greatly   to   be    desired.      Remember   that 
clauses  are  only  needed  where   the  waiving  of  some  of  the  provi- 
sions of  the  standard  policy  are  required,  and  remember  what  we 
said  in  an  earlier   Lecture  that   since  the  standard   policy  was  an 
instrument   devised   by   the  very   best   of  underwriting   and   legal 
talent,  that   it  is  unwise  to  attempt   to  amend   it  unless  conditions 
absolutely    require    it.    and     then    only   within    carefully   defined 
limits.      Clauses  are   in   every  way   fully  as    important   as    forms, 


344  LECTURES  ON  FIRE  INSURANCE 

and  the  same  care  in  drafting  them  and  in  seeing  to  it  that  they 
are  so  worded  as  to  do  away  with  every  possible  doubt  as  to  their 
real  meaning,  should  be  followed  as  in  the  describing  of  proper- 
ties, or  locations,  or  kind  of  liability  covered. 

Illustrations  of   clauses   to  meet   the  conditions  we  have  been 
speaking  of,  are  the  following: — 

Removal  Petmit 

Permits.  "Permission  is  hereby  given  during  the  period  of  thirty 

days  from  date  hereof  to  remove  the  property  insured  under 
this  policy  from  44  vSouth  Main  Street  to  brick  building, 
No.  815  \\\ibash  Avenue,  Chicago. 

"It  is  understood  and  agreed  that  during  such  removal 
this  policy  shall  attach  in  both  locations  in  proportion  as  the 
value  of  the  property  insured  in  each  bears  to  such  value 
in  both  localities,  that  from  and  after  the  expiration  of  said 
thirty  days  and  prior  thereto,  if  the  removal  shall  have  been 
completed,  this  policy  shall  attach  in  the  new  location  only, 
and  the  effect  of  the  average  clause  be  discontinued,  and  that 
additional  premium  pro  rata  of  increase  in  rate,  if  any,  in 
the  new  location  shall  be  paid  within  thirty  days  from  this 
date." 

Mechanics^  Permits 
a.      Builder's  Risk. 

"$ Builder's    risk   on   the story build- 

incr,    with roof    in    course    of    construction,    including 

material  on  ground    immediately  adjacent   thereto,  situated.. 

"Doors  and  windows  to  be  closed  and  locked  every 
night,  and  on  Sundays  and  holidays,  and  shavings  to  be 
thoroughly  cleaned  out  at  least  once  a  week.  Smoking  and 
fire  prohibited  in  or  around  said  building  except  fire  in 
plumber's  or  tinner's  pots.  Such  pots  to  be  taken  out  of 
building  every  night." 

Note.      This  mav  be  used  for  either  owner  or  builder. 

When  policy  is  issued  to  owner  of  building  under  construction 
this  form  fully  protects  him,  but  when  policy  is  issued  to  the 
contractor  or  builder,  let  the  policy  be  drawn  in  favor  of  either 
(or  both)  by  name,  but  add  always  "To  cover  his  (or  their) 
interest."  If  the  owner  makes  partial  payments  as  building 
progresses,  then  the  policy  should  be  issued  in  the  name  of  both 
owner  and  builder  to  prevent  legal  complications  and  secure 
prompt  payment  of  loss. 


FIRE  INSURANCE  CLAUSES  345 


b.  Ordinary  Mechanic's  Perinit. 

''In  consideration    of   $ additional    premium    paid   Permi's. 

therefor,  and  the  warranty  by  the  insured  that  no  paint 
or  similar  substance  shall  be  removed  by  burning  in  or  upon 
the  premises  insured  (or  containing  the  property  insured) 
without  the  consent  of  this  company  indorsed  on  this  policy, 
permission   is    hereby   given   fur  mechanics   to  work    in   and 

about   said   premises    for months    from    date,    to    make 

alterations,  additions  or  repairs,  and  this  policy  (so  far  as  it 
applies  on  building)  shall  also  cover  all  materials  and  sup- 
plies therefor,  therein  or  adjacent,  and  said  alterations  or 
additions  when  completed." 

Note.  This  also  covers  building  materials  and  supplies 
even  though  not  yet  a  part  of  the  building. 

c.  Special  Alechanic's  Permit. 

"Builders'  risks  for  two  months  on  the  two-story,  frame 

dwelling  house,  in  course  of   erection,  situated No  fire 

to  be  allowed  in  said  building  except  for  heating  glue  in  the 
kitchen  fireplace.  Doors  and  windows  to  be  closed  and 
locked  at  night,  and  shavings  to  be  thoroughly  cleaned  out 
once  a  week. " 

Note.  This  form  may  be  used  with  slight  modification  to 
cover  additions  or  alterations  to  an  already  existing  building; 
to  vary  the  term  of  permission  or  to  include  a  charge  for  such 
permission. 

d.  Demolition  Permit. 

"In  consideration   of   $ additional    premium,    this 

company  under  this  policy  shall,  in  case  of  fire,  be  liable 
also  for  the  loss  or  damage  occasioned  by  the  enforcement  of 
any  state  law  or  city  ordinance  which  necessitates,  in  rebuild- 
ing, the  demolition  of  any  portion  of  the  insured  building 
not  damaged  by  fire,  but  not  beyond  the  actual  value,  prior 
to  the  fire,  of  the  property  subject  to  such  demolition  and  not 
for  any  expense  of  greater  cost  of  reconstruction;  provided 
that  in  no  event  shall  this  company  be  liable  under  this 
policy  beyond  the  sum  for  which  it  is  issued,  and  provided, 
further,  that  this  company  shall  be  liable  only  for  such  pro- 
portion of  the  loss  or  damage  as  the  amount  hereby  insured 
bears  to  the  whole  amount  insured  thereon,  whether  such 
other  insurance  contains  a  similar  clause  or  not." 


346  LECTURES  ON  FIRE  INSURANCE 


I 


e.      ImprovenicJit  or  Betterment  Permit. 

Permits.  "In  the  event  of  fire  causing  loss  or  damage  to  assured's 

improvements,  additions,  stairways,  ceilings,  passageways, 
decorations  or  other  betterments  to  leased  building,  or  to 
machinery  or  fixtures  installed  therein  at  the  expense  of 
assured,  the  same  shall  be  adjusted  with  and  paid  to  the 
assured  without  reference  to  or  contribution  from  insurance 
on  the  buildings.  The  intention  of  this  policy  is  to  place 
the  insured,  in  the  event  of  loss,  in  the  position  of  that  of 
absolute  owner  of  said  improvements,  fixtures  and  machinerv.  " 

Note.  While  this  permit  is  one  that  is  not  often  used,  it 
will  avoid  the  opportunity  for  dispute  that  sometimes  arises  with 
owners  of  partly  burned  properties. 

Vacancy  Permit 

Clauses  waiving  voidance  under  this  condition  are  many  and 
varied,  ranging  from  the  broad,  unlimited  Boston  form  to  the 
restrictive  permission  used  in  the  vSouth,  reading: — 

''Permission  is  hereby  given  that  the  premises  herein 
described  may  remain  vacant  or  unoccupied  between  occu- 
pants during  the  entire  term  of  this  policy. 

"And  in  consideration  of  the  increased  hazard,  bv  reason 
of  such  vacancy,  it  is  hereby  understood  and  agreed  that 
during  such  vacancy,  and  in  lieu  of  an  extra  charge  therefor, 
one  third  of  the  amount  of  the  insurance  hereunder  shall  be 
and  is  suspended  and  of  no  effect;  and,  during  the  vacancv 
hereby  consented  to,  the  amount  of  this  policv  is  reduced   to 

dollars    (being    two     thirds    of     original     amount     of 

insurance). 

"Provided,  that  when  the  premises  hereiii  described 
shall  again  become  occupied,  the  amount  of  this  policv  shall 
be  restored  to  the  amount  as  at  the  date  of  this  indorsement." 

Any  of  these  permits  may  be  subject  to  time  limitations,  to 
additional  premiums,  or  to  stipulations  regarding  supervision  of 
premises. 

Unoccupancy  Permits 

Clauses  granting  this  privilege  can  be  veiT  brief  and  simply 
read  as  follows: — 

"In  consideration  of  $ extra  premium,  permission 

is  hereby  given  for  the  property  insured  under  this  policy  to 
remain     unoccupied     for     a     period     of from to 


FIRE  INSURANCE  CLAUSES  347 


Usually  some  stipulation  as   to    care    and    supervision   of   the   permits, 
property  follows  this. 

Cease  Operation  Permit 

A  clause  granting  this  privilege  in  a  manufacturing  plant 
will  read  as  the  Unoccupancy  Permit  just  quoted,  except  that  the 
word  "idle"  takes  the  place  of  "unoccupied,"  and  a  clause  guar- 
anteeing continuous  watchman's  service  should  be  invariably 
required. 

Overtime  or  Extra  Hour  Permits 

Clauses  similar  in  arrangement  to  Cease  Operation  Permits, 
but  defining  the  extra  hours  for  which  the  privilege  is  granted, 
are  applicable  to  this  condition. 

Gasolenet  etc.,  Permits 
^Standard  clauses  designed  to  permit,  and  at  the  same  time  to 
safeguard  the  storage  or  use  of  hazardous  articles  of  the  above 
class,  are  almost  innumerable.  I  would  refer  you  to  the  following 
adopted  by  the  National  Board  of  Fire  Underwriters,  as  showing 
what  may  be  granted  along  these  lines  and  what  restrictions  or 
warranties  should  form  a  part  of  such  permits. 

Stai/dard  Forms. 

No.  lo — Permits  for  buildings  and  contents  when  Automo- 
biles using  gasolene  are  kept  or  stored. 

No.  16 — Permit  for  use  of  a  gasolene  engine. 

No.  17 — Permit  for  use  of  a  gasolene  Gas  Machine,  with 
outside  carbureter. 

No.  18 — do,  do,  inside. 

No.  19 — Permit  for  the  use  of  gasolene  lighting  systems 
having  outside  tanks  and  inside  flame  heated 
generators. 

No.  22 — do,  do,  with  inside  tanks. 

No.  20 — Permit  for  the  use  of  fuel  oil. 

Features  necessary  for  safe  underwriting  in  the  granting  of 
these  permits  are  brought  out  in  them  and  suggest  what  must 
be  required  and  guaranteed  in  the  granting  of  such  permission. 
These  safety  requirements  are  more  matters  of  Insurance  Engi- 
neering and  Chemical  Hazard  than  of  Economics. 


VI 

CLAUSES  OF  EXEMPTION  AND  OF  WARRANT 

CLAUSES  OF  TITLE  AND  INSURABLE  INTEREST 

CLAUSES  FOR  SPECIAL  EMERGENCIES 

The  various  Clauses  which  it  is  our  purpose  to  discuss  at 
this  time,  are  divided,  you  will  note,  into  three  general  classes, 
each  of  which  is  capable  of  more  or  less  sub-division.  Taking 
them  in  the  order  I  have  mentioned,  I  would  ask  you  to  consider 
for  a  time  the  Clauses  that  I  have  termed  as  being  those  of 
"Exemption  and  of  Warrant." 

Clauses  of  Exemption 

Clauses  of  this  nature  are  ones  that  are  adopted  to  exclude 
conditions  that  materially  affect  the  hazard,  and  which  are  de- 
termining factors  in  arriving  at  the  rate  charged  for  insurance  on 
the  property  involved.  While  the  property  covered  is  the  same 
with  or  without  the  attachment  of  clauses  of  this  nature,  there 
are  under  certain  conditions  extra  features  of  hazard  involved,  of 
which,  if  no  mention  was  made  or  against  which  no  exemption 
was  taken,  would  legitimately  be  included  under  the  policy  as 
being  insured  against  no  matter  what  was  the  origin  of  the  fire 
and  whether  these  extra  hazardous  features  were  the  cause  of  it  or 
not. 
Spontaneous  One  of  the  best  illustrations  of  conditions  of  this  sort  is  that 

of  the  familiar  Spontaneous  Combustion  Clause,  a  clause  which 
you  know  is  quite  generally  adopted  in  the  insuring  of  bituminous 
coal  or  structures  containing  the  same.  While  bituminous  coal 
is  subject  to  serious  damage  from  fire  that  may  originate  through 
ordinary  or  external  causes,  it  is  also  specially  liable  to  the  spon- 
taneous combustion  hazard  which  carelessness  in  the  handling  or 
storing  of  it  may  cause  to  become  a  very  present  and  serious 
menace  to  the  coal  itself  and  to  the  surrounding  property.  Danger 
of  loss  of  this  character  can,  with  proper  care  and  watchfulness 
almost  always  be  guarded  against  and  prevented.  On  the  other 
hand,  carelessness  on  the  part  of  the  coal  operator  causes,  through 
the  likelihood  of  spontaneous  combustion,  an  undue  amount  of 
extra    hazard.      Realizing   this,    properties    of   this    character   are 


Combustion. 


MISCELLANEOUS  CLAUSES  349 


ordinarily  rated  in  two  ways.  There  is  the  rate  on  the  Coal  Yard 
or  Coal  Pocket  itself  and  its  contents,  with  no  mention  of  any 
exemption,  and  there  is  an  alternative  and  much  lower  rate  that 
can  be  used  if  the  policy  distinctly  states  that  in  consideration  of 
this  lower  rate,  it  is  understood  and  agreed  that  the  Insuring 
Company  is  not  liable  for  loss  that  may  be  caused  by  the  sponta- 
neous combustion  of  bituminous  coal  on  the  assured's  premises. 
Without  such  a  clause,  as  we  have  already  stated,  loss  from  this 
special  and  constant  danger  is  fully  insured  against,  and  since  the 
risk  of  loss  from  this  cause  is  such  a  great  one,  the  hazard 
assumed  by  the  insuring  Companv  is  vastly  increased.  This  is 
but  one  of  the  Clauses  of  Exemption.  In  it  the  exemption  exists 
in  the  agreement  that  claims  will  not  be  made  for  losses  resulting 
from  spontaneous  fire  in  the  coal. 

The  ordinary  and  simple  form  of  clause  ordinarily  used  in  pro- 
viding this  exemption  from  spontaneous  combustion  liability  is 
worded  substantially  as  follows  : — 

"In  consideration  of  the  reduced  rate  at  which  this  policy 
is  written,  it  is  mutually  imderstood  and  agreed  that  this  com- 
panv is  not  liable  for  loss  occasioned  by  the  spontaneous 
combustion  of  bituminous  coal  on  the  premises  of  the  assured." 

Since  we  have  by  this  illustration  shown  in  a  general  way  the 
purpose  and  working  of  a  Clause  of  Exemption,  it  may  be  inter- 
esting for  us  to  follow  out  the  idea  a  little  more  fully,  and  as 
certain  features  of  marine  insurance  illustrate  these  conditions  more 
clearly,  we  may  with  profit  dwell  on  the  workings  of  this  extra 
hazard,  as  illustrated  by  insurance  of  this  character. 

Fire  in  ships  may  arise  from  a  variety  of  causes  —  from  Attitude  of 
lightning;  spontaneous  combustion  of  the  cargo;  negligence  of  the  Marine 
officers,  or  crew  of  the  ship ;  from  the  acts  of  enemies ;  or  even  the 
precautionary  means  that  sometimes  are  taken  where  a  vessel  is 
burned  by  municipal  authority  to  avoid  danger  of  infection  from 
some  contagious  disease.  Now,  under  the  ordinary  policy,  in  such 
cases,  the  Insuring  Company  is  liable  for  loss  occasioned  by  fire, 
whether  its  origin  is  unexplainable,  or  whether  it  can  properly  be 
assigned  to  either  one  of  the  above  mentioned  causes,  or  some  other 
cause  akin  to  them,  ivith  the  exception  of  combtistion  generated 
through  some  inherent  defect  in  the  s/ib/ect  ins/ircd^  that  is  the 
cargo  of  the  vessel,  or  because  such  cargo  was  shipped  in  a 
dangerous  or  damaged  state.  If,  however,  the  cargo  was  properly 
defined  and  was  in  perfect  condition  at  the  time  of  the  shipment, 


350  LECTURES  ON   FIRE  INSURANCE 

and  later  on  comlnistion  resulted  from  the  entrance  of  sea  water 
upon  said  carg'o  and  its  effect  on  the  same,  it  would  be  covered  by 
the  policy.  In  cases  \vhere  certain  goods  were  insured  and  fire 
originated  in  them  under  either  of  the  conditions  just  described  and 
such  fire  extended  to  other  goods,  or  to  the  ship  itself,  the  insur- 
ance on  such  other  goods  is  responsible  for  the  tire  loss  to  them  and 
the  insurance  on  the  ship  could  be  held  to  pay  the  damage  sus- 
tained by  it. 

We  have  cited  this  condition  of  fire  loss  under  marine  insur- 
ance as  illustrating  one  feature  that  must  be  considered  in  connec- 
tion with  spontaneous  combustion.  If  certain  goods  were  damaged 
by  a  fire  originating  from  spontaneous  combustion  in  some  exposing 
property,  it  would  be  wholly  immaterial  whether  the  properties 
affected  by  this  exposing  fire  were  subject  to  the  provision  of  the 
Spontaneous  Combustion  Clause  or  not,  and  even  the  fact  that  the 
property  in  which  the  fire  originated  carried  insurance  excluding 
damage  from  spontaneous  combustion,  would  not  relieve  the  Com- 
panies insuring  the  exposing  damaged  property  from  liability.  As 
we  stated  in  our  earlier  comments  on  these  Clauses  of  Exemption, 
they  are  designed  not  only  to  eliminate  the  consequences  of  certain 
severe  hazards  for  the  Insurance  Company,  but  also,  by  their 
attachment  to  the  policy,  to  effect  a  very  material  saving  in  the  cost 
of  insurance  to  the  insured.  Exemption  Clauses  are  wise,  since 
they  impose  on  the  insured  the  necessity  of  his  exercising  proper 
care  and  supervision,  which  will  almost  invariably  save  him  from 
losses  that  without  such  supervision  are  likely  to  occur. 

Consequential    Damagfe. 

Another  proper  fieid  for  the  operation  of  Clauses  of  Exemp- 
tion is  the  one  that  is  broadly  termed  ''Consequential  Damage," 
and  in  no  better  way  can  this  be  brought  to  yoiu"  minds  than  by  the 
use  of  another  familiar  illustration.  Cold  storage  plants  are  almost 
invariably  written  with  clauses  of  this  character.  Usually  in  cold 
storage  warehouses  the  low  temperature  that  has  to  be  maintained 
for  the  preservation  of  perishable  merchandise  (generally  food 
stuffs  of  some  sort  or  other)  is  produced  by  a  refrigerating  plant. 
Such  damage  by  fire  as  might  render  the  machinery  of  this  refriger- 
ating plant  unable  to  operate  would  result  almost  immediately  in  a 
rapid  rise  in  temperature  in  the  cold  storage  warerooms,  and  a  con- 
secjuent  damage,  or  total  spoiling  of  the  perishable  contents. 

If  insurance  is  written  on  the  contents  of  a  cold  storage  ware- 


MISCELLANEOUS  CLAUSES  351 

house  simply  describing  the  property  insured,  and  the  location  in  Cold  Storage 
which  it  is  insured  and  makes  no  mention  of  this  consequential  Insurance, 
dam.ige,  a  loss  resulting  from  a  fire  would  find  the  Insurance 
Company  liable,  eyen  though  the  fire  itself  did  not  reach  the  stored 
merchandise,  but  on  account  of  the  crippling  of  the  refrigerating 
plant,  caused  the  destruction  of  the  property  through  increased 
temperature.  If,  on  the  other  hand,  the  clause  exempting  from 
consecjuential  damage  was  attached  and  the  fire  crippled  the  refrig- 
erating plant  and  the  merchandise  was  spoiled  in  consequence, 
there  would  be  no  liability  attaching  to  the  Company. 

This  proyision  is  a  \ylse  one  for  just  the  same  reasons  that  we 
haye  mentioned  in  connection  with  the  Spontaneous  Combustion 
Clause.  A  refrigerating  plant  should  be  so  constructed  and  arranged, 
and  more  than  all,  so  superyised  as  to  render  its  destruction  by  fire 
extremely  unlikely,  and  the  care  necessary  on  the  part  of  the  cold 
storage  warehouse  men  along  these  lines  is  one  that  it  is  not  only 
proper,  but  is  h\\\y  incumbent  upon  them  to  exercise.  Looking  at 
it  from  the  yiewpoint  of  the  Insurance  Companies,  absence  of  this 
Clause  of  Exemption  leayes  them  open  to  a  \ery  seyere  loss  from  a 
fire,  that  not  only  should  haye  been  ayoidable  through  proper  care, 
but  aUo  one  that  may  haye  been  yery  trifling  in  the  extent  of  the 
actual  and  direct  damage  which  it  caused.  Many  companies  refuse 
to  write  cold  storage  merchandise  without  the  attachment  of  this 
clause,  and  the  position  is  an  eminently  proper  one.  The  same 
questions  which  we  raised  relatiye  to  the  effect  on  the  rale  by  the 
Combustion  Clause  are  applicable  to  the  Consequential  Damage 
feature.  A  clause  covering  conditions  of  this  latter  sort  might 
properly  read  : — 

'•  This  clause  to  be  attached  to  all  policies  covering  on 
merchandise,  stocks  or  products  in  houses  artificially  cooled, 
other  than  solely  by  the  storage  of  ice. 

Notice  is  hereby  given,  that  it  is  understood  and  agreed 
that  the  insurance  under  this  policy  does  not  extend  in  its  ap- 
plication to  cover,  and  this  company  shall  not  be  liable  for 
any  indirect  or  consequential  loss  or  damage,  including  loss  or 
damage  caused  by  change  of  temperature  resulting  from,  occa- 
sioned, or  caused  by  the  total  or  partial  destruction  by  fire  of  the 
refrigerating  or  cooling  apparatus,  connections  or  supply  pipes, 
nor  by  the  interruption  of  the  refrigerating  or  cooling  processes 
from  any  cause." 


352 


LECTURES  ON  nRE  INSURANCE 


11 


Greenhouse 
Insurance. 


You  will  note  that  this  is  purely  a  Clause  of  Exemption  and 
not  of  Warrant,  since  the  assured  does  not  agree  under  it  to  maintain 
any  special  supervision,  process  or  device  for  the  safeguarding  of  his 
propertv,  but  simply  accepts  the  insurance  with  a  definite  under- 
standing that  it  does  not  cover  indirect  or  consequential  damage 
resulting  from  injury  to  the  refrigerating  or  cooling  apparatus. 

Another  good  illustration  of  the  consequential  damage  feature, 
and  one  where  the  physical  conditions  are  just  re\ersed  from  those 
that  we  have  cited,  is  that  of  greenhouse  insurance.  In  Winter 
weather  the  preservation  of  the  contents  of  a  greenhouse  is,  of  course, 
absolutely  dependent  on  the  heating  system  employed  to  maintain 
the  proper  temperature  for  the  life  and  growth  of  the  plants. 
Damage  to  the  so-called  "  headhouse  "  or  heating  plant  of  the  system 
might,  as  the  result  of  a  very  small  fire,  cause  an  entire  shut-down 
of  the  heating  plant,  producing  a  drop  in  temperature  in  the  green- 
houses themselves,  and  as  a  result  a  lot  of  frozen  vegetation. 
Consequently  this  hazard,  which  should  be  regarded  in  just  the  same 
way  by  the  assured  that  the  refrigerating  plant  hre  should  be,  and 
which  should  be  constantly  guarded  against,  is  assumed  properly  by 
the  assured  himself.  Bv  changing  the  words,  '•  refrigerating  or 
cooling"  to  "heating  and  circulating,"  in  the  form  cited  for  cold 
storage  plants,  we  ha\'e  a  proper  Greenhouse  Consequential  Damage 
Exemption  Clause. 

Since  Consequential  Damage  Clauses  applv  almost  whollv  to 
contents  rather  than  to  buildings,  it  can  readilv  be  seen  that  the 
opportunity  to  get  rid  of  an  imdesirable  or  unsalable  stock  is  a  very 
tempting  one,  because  a  small  fire  that  only  temporarilv  crippled  and 
injured  the  warehouse  or  the  greenhouse  would  accomplish  it. 
There  is  no  easier  way  to  dispose  of  a  stock  of  bad  eggs  that  the 
owner  of  the  cold  storage  plant  has  discovered  form  a  material  part 
of  the  contents  of  his  plant,  than  to  have  a  small  fire  in  the  refrig- 
erating building  that  would  allow  the  temperature  to  rise  to  the 
spoiling  point  in  the  storeroom  and  then  to  make  it  appear  that  it 
was  this  circimistance,  and  not  conditions  that  previously  existed, 
that  actually  caused  the  deterioration  of  the  stock  in  question. 

Fortunately  perhaps,  from  this  viewpoint  of  cold  storage  in- 
surance, the  owners  and  operators  of  the  plant  are  usually  different 
parties  from  those  directly  owning  and  insuring  the  contents,  al- 
though not  infrequently  we  find  them  to  be  the  same  persons. 


MISCELLANEOUS  CLAUSES  353 

Clauses  of  Warrant 

Clauses  of  Warrant  are  ones  that  are  applicable  to  those  cases 
-where  special  hazards  of  occupancy  or  equipment  are  assumed  under 
the  policy,  with  the  understanding  and  agreement  that  losses  from 
the  ever  present  and  exceptional  risks  associated  with  them,  are  fully 
covered,  provided  that  in  connection  with  these  hazardous  but  per- 
mitted articles  or  devices  certain  safeguarding  methods  are  to  be 
followed  in  connection  with  them.  The  disposition  of  this  feature 
is  not  left  in  doubt.  It  is  clearly  stated  as  to  just  what  the  treatment 
shall  be.  You  can  readily  see  that  a  clause  of  this  nature  is  one  that 
has  to  be  verv  decidedly  taken  into  account  in  the  determining  of  a 
rate.  A  good  illustration  of  clauses  oi  this  nature  is  what  is  known  as 
the  "Acetylene  Gas  Permit  or  Warrant,"  and  such  a  form  reads  : — 

"  In  consideration  of  the  following  warranties  on  the  part   Acetylene 
of   the   assured,   permission   is   hereby   granted,   when   not   in   Permits, 
violation  of  any  restriction  imposed  by  law,  to  use  acetylene 
gas   on   the   premises   described   in   this  policy,   generated   by 

Acetylene  Gas  Machine,  manufactured   by , 

at provided  the  machine  is  contained  in  a  separate 

and    independent    building    located    and    constructed    as    per 
specifications  printed  on  the  back  of  this  permit. 

"The  use  of  liquid  acetvlene  or  gas  generated  therefrom 
on  the  premises  described  herein  is  absolutely  prohibited." 

The  permission  granted  under  this  form  refers  to  the  use  of 
one  of  the  most  dangerous  compounds  ever  introduced  to  the 
public,  and  one  which  should  only  be  tolerated  under  severe 
restrictions.  Therefore,  a  clause  such  as  I  have  just  quoted,  is 
alwavs  accompanied  bv  a  set  of  warrants  and  cautions,  the  war- 
rants stating  how  the  acetvlene  generator,  and  the  calcium  carbide 
used  in  it,  shall  be  cared  for,  and  the  cautions  being  matters  of  an 
educational  nature  relati\'e  to  the  special  hazards  of  the  acetylene. 

These  cautions  are  more  matters  of  insurance  engineering  and 
the  chemistry  of  fire  hazards  than  of  economics,  and  we  will  not 
discuss  them  here. 

It  is  extremelv  important,  however,  that  there  be  attached  to 
the  policv,  as  a  part  of  the  clause,  these  w  arranties  and  cautions,  for 
thev  therebv  become  a  part  of  the  contract,  and  violation  of  them 
materially  weakens  the  position  of  the  assured,  and  further  safe- 
guards the  insuring  companv.  In  fact,  since  the  warrants  are 
essentiallv  a  part  of  the  contract,  any  violation  of  them  practically 
constitutes  a  voidance  of  the  policy. 


354 


LECTURES  ON  FIRE  INSURANCE 


Gasolene 

Permits. 


Automobile 
Insurance. 


Mucl:  the  same  conditions  exist  in  the  case  of  printers  and 
other  parties  who  are  likely  to  use  benzine  or  similar  cleaning  com- 
pounds in  connection  with  their  business.  Ordinarily,  in  rating^ 
properties  of  this  sort  quite  a  material  advance  is  made  for  the 
assumption  that  there  must  be  cleansing  material  of  this  nature  in 
the  phint.  Where,  however,  the  assured  feels  that  he  can,  and  is 
willing  to  di'spense  with  the  use  of  them,  he  is  able  to  effect  a  con- 
siderable saving  in  the  cost  of  his  insurance  bv  the  attachment  of  a 
clause  warranting  that  such  materials  shall  not  be  used  or  kept  bv 
him  during  the  hfe  of  the  policy.  Such  a  Clause  of  Warrantv  is 
the  following  : — 

"  Warranted  bv  the  assured  that  no  l)enzine,  gasolene, 
mineral  turpentine,  naphtha  or  other  product  of  petroleum, 
except  refined  coal  oil  of  lawful  test,  shall  be  used  or  kept  on 
the  premises  during  the  life  of  this  policy." 

The  greatlv  extended  use  of  automobiles  and  the  provisions 
that  it  has  been  necessary  to  prescribe  as  to  the  way  in  which  thev 
shall  be  kept,  housed  and  cared  for,  have  called  for  Warranty 
clauses  defining  and  niaking  a  part  of  the  contract  the  restricions 
for  safety  which  it  has  been  deenied  advisable  to  impose.  Since  it 
is  these  same  gasolene  or  benzine  feature  that  is  the  one  of  special 
hazard  in  connection  with  automobiles,  the  clauses  of  warrant  are 
ones  defining  the  methods  used  for  filling  and  caring  for  the 
machines,  and  also  limiting  the  quantitv  of  gasolene  that  there  may 
be  in  the  insured  premises  at  any  one  time.  Clauses  of  this  nature 
affect  more  generallv  the  policies  that  are  used  on  the  containing 
building  rather  than  on  the  car  itself,  but  thev  would  be  equally 
applicable  to  lines  of  fire  insurance  written  covering  the  automobile 
specificallv.  Since  in  insuring  automobiles  it  is  generally  desired 
to  have  one  policv  cover  all  classes  of  mishaps  to  which  thev  mav 
possibly  be  subjected,  and  since  the  marine  form  of  policy  more 
readily  complies  with  all  of  these  conditions,  direct  insurance  on 
automobiles  is  generally  of  the  marine  rather  than  of  the  straight 
fire  type. 

The  special  feature  of  warrant  that  we  wish  to  impress  here  is 
that  the  warrantv  clause  or  rider  attached  to  the  policy  which  grants 
permission  for  either  the  storage  or  the  use  of  any  of  the  hazardous 
materials  referred  to,  shall  at  the  same  time  be  restrictive  in  its 
nature  and  shall  define  clearly  the  conditions  under  which  such 
hazardous  materials  shall  be  kept  and  used.  In  the  event  of  a  loss 
then,  the  fact  that   these  restrictions  and  warrants  are  a  part  of  the 


MISCELLANEOUS  CLAUSES  355 

contract  gi^•es  the  strongest  sort  of  a  defense  in  the  event  of  a  loss 
occurring  from  a  tire  directly  attributable  to  a  non-compliance  with 
the  warranty  conditions. 

Another  class  of  warranties  may  be  illustrated  by  a  clause  like   Some  other 
the  following:—  Warranties. 

"It  is  a  condition  of  this  policy  and  a  warranty  on  the 
part  of  the  assured  that  the  dwelling  above  described  shall  be 
occupied  by  the  owner  and  his  family,  and  if  occupied  by  any 
other  party  this  policy  shall  be  void  and  of  no  effect." 

In  this  you  will  note  that  the  owner  oi  the  insured  dwelling 
agrees  that  the  dwelling,  against  the  loss  of  which  he  is  insured, 
shall  be  occupied  by  himself,  and  if  he  fails  so  to  occupy  it,  and 
rents,  leases  or  permits  its  occupancv  by  any  other  partv,  the  insur- 
ance immediately  becomes  void. 

The  clauses  of  warrant  that  are  used  in  automatic  spriidvler 
insurance  further  illustrate  this  warranty  feature  that  we  are 
speaking  of.     A  form  used  for  this  purpose  is  the  following  : — 

"■In  consideration  of  the  reduced  rate  of  premium  granted 
on  the  above  described  premises  by  the  Underwriters'  Associ- 
ation of  New  York  State  for  the  introduction  of  Automatic 
Sprinklers  therein,  it  is  hereby  made  a  part  of  this  policy  that 
the  assured  (if  the  owner  of  the  realty,  or  if,  being  a  tenant, 
in  control  of  the  sprinkler  equipment)  shall  maintain  said 
Automatic  Sprinkler  System  in  good  working  order  during  the 
life  of  this  insurance,  and  that  no  change  shall  be  made  in  said 
Sprinkler  Equipment  or  the  water  supply  therefor  without 
having  first  obtained  the  consent  and  approval  of  the  said 
Underwriters'  Association  of  New  York  State." 

This  form  we  have  alreadv  alluded  to  in  speaking  of  automatic  The  Con- 
sprinkler  insurance,  but  it  is  interesting  to  note  at  this  point  the  sidcration. 
special  warranty  feature  embodied.  You  see  that  the  clause  begins 
with  the  words  "In  consideration  of  the  reduced  rate,  etc."  This 
is  always  a  wise  provision  in  the  framing  of  any  warranty  clause, 
since  it  plays  the  same  part  in  the  conditions  of  the  contract  as  do 
the  words  "  ^"alue  received"  which  are  customarily  used  on  pro- 
missory notes,  or  "  In  consideration  of Dollars"  that  is  com- 
monly used  as  the  opening  phrase  in  a  deed  or  bill  of  sale.  It 
recognizes  that  there  has  been  a  consideration  between  the  parties, 
and  that  in  the  case  of  an  insurance  policy  the  requirements  are 
not  made  by  the  insurer  without  a  consideration  being  gi\  en  there- 
for. In  this  way  the  terms  of  the  contract  are  verv  materially 
strenorthened. 


356 


LECTURES  ON  FIRE  INSURANCE 


Electric 
Warranties. 


The  Im- 
portant 
Feature  of 
Warranties 
and  Exemp- 
tion. 


You  will  also  note,  referring  again  to  this  sprinkler  warranty, 
that  the  assured  or  whoever  is  in  control  of  the  sprinkler  equip- 
ment, agrees  to  maintain  said  equipment  in  good  working  order, 
and  to  make  no  change  in  its  arrangement  or  effectiveness,  without 
o1')taining  pre^■ious  consent  from  the  proper  parties. 

Still  another  form  of  Warranty  Clause  appears  in  what  is 
called  the  "General  Sprinkler  Guarantee,"  a  form  that  is  espec- 
ially applicable  in  places  where  official  inspecticni  of  sprinkler 
equipments  is  both  difficult  and  infrequent.  A  form  to  meet  such 
conditions  is  the  following  :  — 

"This  policy  having  been  issued  at  a  reduced  rate  of 
premium  on  account  of  the  installation  of  an  Automatic 
Sprinkler  Equipment  in  the  premises  described,  it  is  hereby 
made  a  condition  of  this  policy  that  the  assured  shall  use  due 
diligence  to  maintain  such  Automatic  Sprinkler  System  in 
good  working  order  during  the  life  of  this  policy." 

This  Clause,  in  addition  to  naming  the  consideration  granted 
(that  of  reduced  rate),  includes  a  promise  by  the  assured  to  use  due 
diligence  to  maintain  the  sprinkler  equipment  in  good  working 
order  during  the  life  of  the  policy. 

While  due  diligence  is  a  pretty  difficult  thing  to  clearly  define, 
and  a  still  more  difficult  thing  to  prove  the  non-existence  of  in  the 
event  of  a  loss,  a  clause  like  this  acts  to  quite  an  extent  as  a  safe- 
guard, and  in  some  instances  as  a  defense  against  losses  that  are 
directly  due  to  the  assured's  own  carelessness  and  neglect,  and  his 
going  back  on  his  pledge  and  at  the  same  time  \'iolating  a  provision 
of  the  standard  policy  contract. 

We  would  also  call  yoin"  attention  to  the  \varranties  that  are 
commonly  used  in  connection  with  electrical  equipments.  In  these 
clauses  not  only  is  permission  gi^  en  to  use  electricity  for  lighting 
or  other  purposes,  but  accompanying  this  permission  is  a  warranty 
on  the  part  of  the  assured  as  to  the  nature  of  the  installation  of  the 
electrical  equipment,  aiul  also  pledges  as  to  the  wav  in  which  it 
shall  be  maintained. 

The  all-important  thing  to  bear  in  mind  in  connection  with 
anv  of  these  clauses  of  exemption  and  warrant  is  to  see  to  it  that 
thev  are  so  worded  that  they  not  only  become  an  actual  part  of  the 
contract  itself,  but  that  they  define  clearly  what  is  allowed,  to  what 
extent  it  is  allowed,  and  the  conditions  guaranteed  to  be  maintained 
on  account  of  its  allowance.  Of  course,  restrictions  of  this  sort  re- 
late only  to  those  materials,  devices  or  processes  that  the  voidance 


MISCELLANEOUS  CLAUSES  357 

provisions  of  the  policy  cite  as  a  cause  for  the  immediate  nullifying 
of  the  contract  of  insurance. 

Clauses  of  Title  and  Insurable  Interest 

Under  this  topic  your  attention  is  directed  to  clauses  that  are 
frequently  used  recognizing  other  interests  than  those  of  sole  and 
unconditional  ownership.  Also  clauses  stating,  if  the  sul^ject  of 
insurance  be  a  building,  that  it  is  located  on  leased  land  (if  such  is 
the  case),  and  also  clauses  which  may  grant  any  different  right,  or 
rights,  of  subrogation  than  those  that  are  especially  outlined  in  the 
body  of  the  policy  or  that  may  waive  this  right.  The  provisions 
of  the  New  York  standard  form  of  policy  call  for  greater  explicit- 
ness  in  clauses  of  this  nature  than  do  those  that  form  a  part  of  the 
Massachusetts  standard. 

The  latter  form,  you  will  note,  states  that  the  policy  "  shall  ^^ss.  Policy 
be  void  if  any  material  fact  or  circumstance,  stated  in  writing,  has  'ovisions. 
not  been  fairly  represented  by  the  assured."  Further  than  that 
there  is  no  restriction  as  to  the  presence  of  mortgages  or  liens  of 
any  kind  on  the  property,  or  to  the  fact  that  the  building  (if  the 
subject  of  the  insurance  be  a  building)  is  standing  on  land  owned 
by  someone  other  than  the  owner  of  the  building  itself. 

In  the  event  of  a  loss  occurring  where  any  of  these  conditions 
exist  and  where  the  policy  contract  in  use  is  of  the  Massachusetts 
form,  it  always  raises  a  question  in  the  event  of  a  dispute  arising  as 
to  the  validity  of  the  claim  under  this  provision,  as  to  whether  in 
the  particular  case  under  consideration  the  withholding  of  the  in- 
formation as  to  a  mortgage,  or  a  lien,  or  leased  land,  was  a  material 
fact  or  circumstance,  and  if  the  Court  should  decide  that  it  was  not, 
and  that  it  created  no  increase  of  hazard,  there  usually  can  be  no 
successful  defense  set  up. 

Turning  to  the  New  York  standard  form,  we  find  these  pro-  New  York 
visions  of  the  policy  very  much  more  clearly  defined.     For  example.  Policy 
the  policy  will  be  void  "  if  the  interest  of  the  insured  be  other  than  Provisions, 
unconditional  and  sole  ownership,  or  if  the  subject  of  insurance  be 
a  building  on  ground  not  owned  by  the  insured  in  fee  simple,  or  if 
the  subject  of  insurance  be  personal  property  and  be  or  become 
encumbered  by  a  chattel  mortgage,  or  if,  with  the  knowledge  of 
the  insured,  foreclosure  proceedings  be  commenced  or  notice  given 
of   sale  of  any  property  coxered  by  this  policy  by  virtue  of  any 
mortgage  or  trust  deed."     You  will  note  how  much  more  clearly 
the  voidance  conditions  that  relate  to  title  and  ownership  are  de- 


358 


LECTURES  ON  FIRE  INSURANCE 


fined  in  this  New  York  standard  form  than  is  the  case  in  that  of 
Massachusetts.  In  considering^  clauses  that  recognize  these  varying 
conchtions  of  title  and  ownership,  if  we  see  to  it  that  they  comply 
with  the  New  York  provisions  we  are  sure  to  be  on  the  safe  side 
in  all  cases. 
Mortgagee  Much  the  most  frecjuent  of  the  clauses  relating  to  the  title  to 

Interests.  the  insured  property  are  those  that  recognize  other  interests.      These 

are  mainly  in  the  case  of  buildings  and  are  usually  those  of  a  mort- 
gagee, or  in  the  case  of  personal  property  the  conditions  that  are 
imposed  by  a  so-called  chattel  mortgage.  For  purposes  of  safety 
and  to  give  additional  security  to  a  creditor,  policies  are  at  times 
made  payable  to  such  creditor  even  though  he  does  not  have  a 
formal  lien  on  the  property  by  virtue  of  a  duly  recorded  mortgage 
or  assignment.  In  cases  of  this  sort  a  very  simple  clause  will  suf- 
fice, and  such  a  clause  is  usually  termed  the  "  Loss  Payable  Clause," 
and  only  states  that 

"Loss,    if  any,    is  payable    to as   his   in- 
terest may  appear." 

Should  a  loss  occur,  the  Insuring  Company  noting  this  clause 
on  its  policy  will,  in  making  out  its  draft  in  payment,  include  not 
only  the  name  of  the  assured,  that  is  the  party  to  whom  the  policy 
directly  runs,  but  will  also  include  on  the  draft  or  check  the  name 
of  "  so  and  so,"  the  payee  mentioned. 

When  a  mortgage  exists  it  is  desirable  to  be  somewhat  more 
explicit  than  this,  in  order  to  make  clear  that  the  provision  of  the 
standard  policy  as  to  sole  and  unconditional  ownership  has  not 
been  ignored  in  the  taking  out  of  the  insurance,  and  mortgagee 
clauses  are  usually  written  in  one  of  two  different  forms.  The  first 
is  what  is  ordinarily  spoken  of  as  simply  the  Mortgagee  Form,  and 
reads  as  follows  :  — 

"  $ On  his  interest  as  mortgagee  on  the  four-storv 

brick  building  situated  and  known  as  Nos It  is  agreed 

that  whenever  this  company  shall  pay  to  the  mortgagee  any 
loss  under  this  policy,  and  shall  claim  that  as  to  the  mortgagor 
or  owner  no  liability  existed,  it  shall  at  once  be  legally  sub- 
rogated to  all  the  rights  of  the  mortgagee  under  any  and  all 
obligations  to  the  mortgage  debt  to  the  extent  of  such  payment, 
or  at  its  option  may  pay  the  whcde  principal  and  interest  due 
on  the  mortgage,  and  shall  thereupon  receive  a  full  assign- 
ment and  transfer  of  the  mortgage,  and  all  other  obligations 
held  as  security  or  collateral  for  the  mortgage  debt,  but  no 
such  subrogation  shall  impair  the  right  of  the  mortgagee  to 
recover  the  full  amount  of  his  claim." 


MISCELLANEOUS  CLAUSES  359 

In  contrast  to  this  form  clauses  are  in  common  use  in  many  of 
the  States  which  are  very  much  more  explicit,  and  of  which  the 
following  is  a  sample  :  — 

"Mortgage  Clause  with  Full  Contribution 

Loss,  if  any,  payable  to Bank  as  mortgagee 

(or  trustee)  as  interest  may  appear,  and  this  insurance,  as  to 
the  interest  of  the  mortgagee  (or  trustee)  only  therein,  shall 
not  be  invalidated  by  any  act  or  neglect  of  the  mortgagor  or 
the  owner  of  the  within  described  property,  nor  by  any  fore- 
closure or  other  proceedings  or  notice  of  sale  relating  to  the 
property,  nor  by  any  change  in  the  title  or  ownership  of  the 
property,  nor  by  the  occupation  of  the  premises  for  purposes 
more  hazardous  than  are  permitted  by  this  policy.  Provided, 
that  in  case  the  mortgagor  or  owner  shall  neglect  to  pay  any 
premium  due  under  this  policy  the  mortgagee  (or  trustee) 
shall,  on  demand,  pay  the  same." 

This  is  only  a  part  i)i  the  full  contribution  mortgage  clause. 
It  also  contains  the  following  provisions,  that  the  mortgagee  (or 
trustee)  must  notify  the  Company  of  any  change  of  ownership  or 
occupancy,  or  increase  of  hazard.  Also  that  he  shall  be  liable  on 
demand  for  additional  premium  due  to  such  increased  hazard,  and 
that  if  he  does  not  properly  attend  to  this  feature  the  policy  shall 
be  void.  Under  this  form,  too,  the  Company  further  reserves  the 
right  by  a  special  Clause  to  cancel  the  policy  at  any  time,  as  pre- 
scribed in  the  standard  policy,  but  that  in  such  case  the  policy  will 
continue  in  force  for  the  benefit  of  the  mortgagee  for  ten  days  after 
notice  may  have  been  served  on  him,  after  which  time  his  rights 
under  the  policy  cease.  This  full  contribution  clause  still  further 
provides  as  to  the  relation  which  other  insurance  on  the  property 
shall  bear  to  loss  or  damage  sustained  when  held  by  parties  having 
an  insurable  interest  therein,  whether  as  owners  or  mortgagees. 
This  is  a  very  important  provision  of  the  full  contribution  clause, 
for  it  prevents  any  Company  from  being  obliged  to  pay  possibly  a 
total  loss  to  a  mortgagee  where  the  other  insurance  upon  the  same 
property  in  which  the  mortgagee  has  no  interest  may  get  off  with 
a  very  trifling  contribution. 

Both  of  these  forms  carry  with  them  the  right  for  the  Com- 
pany paying  a  loss  to  the  mortgagee  to  be  immediately  subrogated 
to  all  the  rights  that  the  mortgagee  formerly  held.  This  usually 
means  that  if  the  Insuring  Company  shall  pay  to  the  mortgagee  the 
full  amount  of  his  mortgage,  they  will  immediately  he  placed  in 
the    position    of    mortgagees    and    have    the    same    lien    upon    the 


360  LECTURES  ON  FIRE  INSURANCE 


property,  that  formed  the  coHateral  for  the  mortgage,  that  the 
mortgagees  themselves  had. 

Mortgagee  interests  are  so  \aried  and  the  conditions  under 
w  hich  mortgage  loans  are  made  are  of  such  different  natures  that 
a  wide  \ariety  of  phrasing  has  crept  into  the  so-called  mortgagee 
clauses,  though  essentially  they  are  one  or  the  other  of  the  two 
classes  of  clauses  that  we  have  just  spoken  of  :  that  is,  those  either 
with  or  without  the  full  contribution  feature.  Whenever  possible, 
it  is,  of  course,  in  the  interests  of  the  Insuring  Company  to  secure 
the  attachment  of  the  full  contribution  clause,  especially  where  there 
may  be  a  doubt  as  to  the  placing  of  the  payee  or  mortgagee  clause 
on  all  the  other  policies  covering  the  same  property.  At  times,  too, 
it  is  desirable  for  the  mortgagee  to  have  made  a  part  of  the  clause 
the  words,  "  under  present  or  any  future  mortgages."  This  clause, 
where,  for  example,  on  a  building  in  course  of  construction  addi- 
tional monies  may  be  advanced  from  time  to  time  as  the  work  pro- 
gresses, is  a  safeguard  to  both  the  mortgagor  and  the  mortgagee  and 
is  not  objectional  to  the  Insuring  Companv. 

A  somewhat  unusual  clause  in  connection  with  mortgagee 
interests  is  the  so-called  ''  Clause  of  Consent,"  reading: — 

"  At  the  request  of  the  insured  this  companv  herebv  con- 
sents that  loss,  if  any,  under  this  policy,  shall  be  pavable  to 

(subject    to    Mortgagee    Clause    attached),    not 

intending  to  waive  and  not  thereby  waiving  any  previous 
rights,  privileges  or  equities  secured  to  this  company  by  the 
terms  and  stipulations  of  this  policy." 

Clauses  of  this  nature  may  be  attached  after  the  date  of  the 
policy,  and  call  for  them  is  brought  about  by  the  fact  that  a  pro- 
perty on  which  there  is  already  existing  insurance  has  become 
subject  to  a  mortgage,  and  the  Insuring  Companv  is  asked  to  con- 
sent to  the  payment  of  the  loss,  if  any,  to  the  mortgagee,  but  at  the 
same  time  you  will  note  that  it  does  not  waive  any  of  the  previous 
rights  or  privileges  that  might  accrue  to  it  under  the  original  policy 
contract. 

With  any  payee  clause,  whether  to  a  mortgagee  or  anyone  else, 
the  condition  for  the  Insuring  Company  to  be  sure  of  is  as  to  the 
relation  of  the  lien  to  sound  value.      In  other  wortls,  what  is  the 
equity  in  the  propert}"  of  the  designated  owner? 
Buildings  on  The  clause  relating  to  the  leased  land  feature,  in  order  to  meet 

the  provisions  of  the  New  York  policy,  is  very  simple,  and  perhaps 
is  more  properly  a   part  of  the  descriptive  form  attaching  to  the 


Leased 
Land. 


MISCELLANEOUS  CLAUSES  361 

policy  than  a  clause  of  title.  It  simply  states  that  the  insured 
building  stands  on  leased  land.  ]More  than  that  it  is  not  necessary 
to  say  anything,  though  the  careful  underwriter  will,  of  course,  at 
once  seek  to  find  out  what  are  the  conditions  of  the  lease  under 
which  the  building  is  allowed  to  stand  on  land  belonging  to  some- 
one other  than  the  actual  owner  of  such  building.  Simply  stating 
that  the  building  is  on  leased  land  discloses  the  condition  required 
by  the  New  York  standard  form  in  order  to  pre\ent  a  voidance  of 
the  contract.  \Vhile  it  is  not  essential  here  in  jSIassachusetts  to 
disclose  this  fact,  so  far  as  a  voidance  of  the  policy  goes,  it  is,  in 
justice  to  the  Insuring  Company,  a  feature  that  should  be  known, 
since  in  many  cases  it  is  a  material  fact  or  circumstance  affecting, 
the  property. 

Clauses  of  subrogation  are  not  used  to  any  great  extent,  because  Subrogation, 
the  right  to  subrogate  is  clearly  granted  under  both  of  the  standard 
forms  of  policy  that  we  have  been  especially  considering.  In  Mas- 
sachusetts no  restriction  is  placed,  other  than  the  extent  of  the 
amount  paid  on  the  loss,  as  to  the  rights  to  recover  under  subroga- 
tion from  anv  partv  against  whom  the  assured  mav  feel  that  he  has 
a  claim,  usuallv  on  account  of  negligence  contributory  to  the  tire. 
In  New  York  State  the  further  restriction  is  placed  that  the  Insur- 
ing Company  can  only  claim  this  right  of  subrogation  (and  to  the 
same  extent  as  in  Massachusetts)  when  they  are  ready  to  claim  that 
the  fire  was  caused  by  the  act  of  neglect  of  some  third  party. 

Clauses  waiving  the  right  to  subrogate  are  more  frequent  and 
are  especially  so  in  poHcies  on  manufacturing  plants  located  on 
lanil  leased  from  or  controlled  by  a  railroad.  Such  clauses  are 
agreements  on  the  part  of  the  Assured  not  to  grant  the  right  of  sub- 
rogation against  the  Railroad,  and  are  usually  subject  to  an  atldi- 
tional  premium. 

Clauses  for  Special  Emergfencies 

Probably  the  most  interesting  clauses  that  we  have  for  consid- 
eration at  this  time  are  those  that  in  a  general  way  may  be  termed 
Clauses  for  Special  Emergencies.  Under  this  head  I  allude  to 
clauses  that  are  drafted  for  use  as  binders,  and  clauses  aiming  to 
cover  or  to  exclude  losses  due  to  earthquakes  or  explosions,  or  some 
kindred  disaster.  In  a  certain  sense  all  clauses  of  this  special  emer- 
gency type  are  ones  of  permission,  since  they  grant  special  privileges 
not  ordinarily  contemplated  under  the  standard  contract. 

The  first  of  these  special  emergency  conditions  that  are  spoken 


362  LECTURES  ON  FIRE  INSURANCE 


Binders.  of  is  that  of  binders.      You  all  know  how  important  it  often  is  to  be 

able  to  protect  by  insurance  at  a  moment's  notice  some  property  that 
it  is  not  possible  at  the  time  for  an  insurer  to  issue  a  policy  on ; 
merchandise,  perhaps,  that  is  being  delivered  at  short  notice  into  a 
warehouse  where  tlie  rate  is  not  yet  known,  or  where  other  feature? 
necessary  to  the  completion  of  the  policy  contract  are  still  m.itters 
of  doubt.  Under  these  conditions  the  binder  (an  everyday  occur- 
rence) naturally  comes  into  use.  There  is  no  special  clause  or  form 
prescribed  for  this  special  emergency  instrument.  The  simple  ac- 
know  ledgment  by  an  authorized  agent  or  official  that  he  is  holdino- 
binding  a  certain  amount  in  his  company  on  a  specified  property 
owned  by  the  party  in  whose  interest  the  insurance  is  being  asked, 
and  located  in  a  properly  defined  place,  or  places,  is  all  that  is 
necessary,  and  wdiile  such  binders  are  usually  in  the  form  of  simple 
written  agreements,  a  verbal  binder  in  the  eyes  of  the  law  is  fully 
as  binding  as  if  it  was  the  subject  matter  of  a  full  fiedged  legal  doc- 
ument. There  would  be  no  use  in  prescribing  anv  set  form  or  clause 
to  be  used  in  the  phrasing  of  binders,  for  since  the  emergencies  under 
which  they  are  called  into  use  are  almost  always  sudden  and  unex- 
pected, no  one  would  think  of  living  up  to  any  such  prescribed  form 
or  clause,  but  the  Courts  have  clearly  defined  that  the  act  of  issuing 
a  binder  is  of  absolutely  the  same  importance,  except  in  that  of  form, 
as  is  the  writing  and  delivering  of  a  policy.  Binders,  it  must  be 
remembered,  are  subject  to  the  same  conditions  over  cancellation 
that  obtain  with  policies. 
Earthquakes  Emergencies  such  as  arise  under  conditions  of  fire  losses  at- 

and  Distur-  tendant  upon  earthquake,  raise  questions  of  intense  interest,  and 
bancesof  those  of  us  who  spent  weeks  in  connection  with  the  losses  at  San 
Francisco  in  1900  have  good  reason  to  belie\e  that  the  effect  of 
earthquake  conditions  on  the  insurance  contract  is  truU-  a  most 
puzzling  one.  The  standard  policy,  as  ordinarily  drafted,  lists  a 
number  of  special  emergency  conditions,  such  as  invasion,  insurrec- 
tion, riot,  civil  war,  military  or  usurped  power  and  explosion  of  any 
kind. 

In  some  instances  companies  have  felt  that  loss  resulting  from 
fire  caused  by  an  earthquake  could  be  satisfactorilv  voided  in  the 
policy  contract  by  the  simple  insertion  of  the  word  "earthquake" 
along  with  the  ••  ci\il  war,  insurrection,"  etc.,  features  of  the  policy. 
ICxperience  has  clearly  shown  though,  and  it  was  demonstrated  over 
and  over  again  in  San  Francisco,  that  the  insertion  of  this  word  did 
not  necessarily  void  the  contract.      I'hc  buideii  of  proof  was  at  once 


MISCELLANEOUS  CLAUSES  363 


thrown  upon  insuring  companies.  Did,  or  did  not,  the  fire  that  de- 
stroyed the  subject  of  the  insurance  start  from  earthquake?  Sup- 
posing, too,  that  the  earthcpiake  did  cause  a  fire  in  a  certain  huikling, 
and  that  from  that  building  the  fire  passed  on  to  an  entirely  separate 
property  belonging  to  another  party  and  destroyed  it.  The  cause 
of  the  destroying  lire  to  the  last  mentioned  building  could  simply  be 
set  down  as  fire  in  an  exposing  building.  E\  en  were  the  insurers 
always  able  to  pro\e  clearly  that  the  origin  of  the  fire  was  from  the 
earthquake  (a  condition  that  it  is  almost  impossible  to  prove  where 
earthquake  conditions  exist),  then  in  cases  like  that  of  the  second 
building  there  would  still  be  no  ground  for  dispute. 

\\'hether  or  no  a  clause  can  be  effectively  drafted  by  insurers 
that  will  void  the  policy  in  the  event  of  an  earthquake  seems  to  be 
a  matter  of  grave  doubt.  The  strongest  form  of  clause  yet  dexised, 
and  the  one  that  was  in  use  with  many  companies  in  Jamaica  at  the 
time  of  the  Kingston  earthquake  a  few  years  ago,  reads  like  this ;  — 

"In  consideration  of  the  reduced  rates  atwhich  this  policy 
is  written,  it  is  hereby  mutually  understood  and  agreed  that  in 
the  event  of  an  earthquake  this  policy  shall  immediately  cease 
and  be  void  and  shall  so  remain  for  a  period  (usually  I  believe) 
of  se\enty-two  hours." 

It  would  certainly  seem  as  if,  should  a  fire  immediately  follow 
an  earthquake,  that  a  clause  of  this  kind  forming  a  part  of  the  policy 
contract  absolutely  voided  the  same  and  thoroughly  safeguarded 
the  Insuring  Company,  but  even  this  clause  has  not  proved  infallible 
by  any  means,  for  the  claim  was  made  in  Jamaica  that  at  the  time 
the  earthquake  occurred  there  was  a  small  lire  just  started  in  one'of 
the  buildings  that  afterwards  fell  down,  and  that,  therefore,  at  the 
time  the  lire  began  which  eventually  destroyed  a  large  part  of  the 
city,  the  insurance  was  in  force  and  the  contract  effective.  Illus- 
trations can  be  multiplied  without  number,  and  many  of  them  ex- 
tremely interesting,  as  illustrating  not  only  the  ingenuity  of  the 
underwriters,  but  the  difficulties  of  drafting  a  clause  that  can  truly 
be  said  to  be  earthquake  proof. 

Another  interesting  feature  that  arises  in  connection  with  earth-  Fallen 
quake  losses  is  that  of  fallen  buildings.  There  is  burned  into  the  Buildings* 
minds  of  all  who  were  in  San  Francisco  in  the  year  1906  the  Avords, 
*'If  a  building  or  any  part  thereof  fall,  except  as  the  result  of  fire, 
insurance  by  this  policy  on  such  building  or  its  contents  shall  im- 
mediately cease."  What  a  troublesome  clause  this  was  to  the  San 
Francisco  adjusters  !      Not  only  was  it  very  difficult  after  a  building 


364  LECTURES  ON  FIRE  INSURANCE 


had  been  destroyed  by  tire  to  prove  whether  or  not  it  was  a  standing 
or  a  fallen  building  at  the  time  the  fire  reached  it,  but  the  question 
"any  part  thereof"  was  the  cause  of  constant  disputes  between 
claimants  and  those  adjusters  wdio  were  seeking  to  make  salvages 
on  any  possible  pretext,  some  claiming  that  where  a  chimney  tipped 
o\er,  or  where  a  cornice  was  somewhat  injured,  or  the  plastering 
inside  the  building  might  have  fallen  slightlv,  that  a  voidance  of  the 
policy  was  thereby  constituted  and  that  there  was  no  insurance  in 
force  at  the  time  the  tire  reached  it.  There  were  cases  of  this  sort 
where  there  was  indisputable  proof  that  the  building  had  been  more 
or  less  damaged  before  it  burned,  but  the  unreasonalileness  of  main- 
taining that  because  a  chimney,  for  example,  had  fallen  above  the 
roof,  that  necessarily  such  building  had  become  unprotected  by  the 
policy  taken  out  to  safeguard  it,  was  one  that  the  more  reputable 
companies  did  not  seek  to  make  a  defense  of.  The  usual  course  of 
procedure  among  these  companies,  if  there  was  any  evidence  that 
the  building  was  in  a  damaged  condition  before  the  tire  reached  it, 
was  to  arrive  as  satisfactorily  as  might  be  at  the  value  of  the  build- 
ing in  its  damaged  condition,  and  adjust  the  insurance  upon  that 
basis. 

Before  lca\  ing  this  subject  of  earthquakes,  I  would  call  your 
attention  to  a  form  that  I  see  is  in  use  in  some  places,  designed  to 
meet  this  earthquake  condition.      This  form  reads  : — 

"  This  Company  shall  not  be  liable  for  loss  or  damage 
occasioned  by  or  through  any  volcano,  eanhquake,  hurricane 
or  other  eruption,  convulsion  or  disturbance  of  nature." 

My  only  comment  on  this  form  is  that  it  is  useless  for  just  such  reasons 
as  we  ha\e  stated. 
Explosions.  Just  a  word  on  one  of  the  other  special  emergency  cases  for 

which  clauses  arc  occasionally  designed.  I  refer  to  explosion. 
Damage  caused  by  explosion  is  clearlv  not  co\ercd  bv  the  standard 
policy  according  to  its  own  phraseology.  If  the  explosion  is  the 
result  of  a  fire  that  is  already  under  wav,  the  fire  being  the  direct 
cause  of  the  explosion,  and  the  explosion  simplv  being,  as  we  might 
say,  a  part  of  the  tire  damage,  the  tire  policy  is.  of  course,  directly 
liable,  but  if  the  conditions  are  reversed  and  an  explosion  occurs 
which  causes  the  tire,  then  tlie  intent  of  the  polic\  is  \erv  clear  that 
a  voidance  has  been  constituted,  and  that  there  is  no  liability.  \'()u 
can  readily  see  that  the  same  conditions  of  doubt  and  ditlicult\'  of 
proof  will  at  once  come  up  in  cases  of  this  sort  that  occur  under 
earthciunke  conditions,  and  the  same  line  of  reasoning  that  we  spoke 


MISCELLANEOUS  CLAUSES  365 

of  in  connection  with  earthcjiiake  clauses  is  equally  applicable  here. 
A  great  many  extremely  interesting  features  have  come  up  in  con- 
nection with  fire  losses  wheie  there  were  explosions.  One  of  these 
is  the  well  known  Tarrant  case  in  New  York,  which  was  the  subject 
of  much  litigation.  A  conflagration  originated  in  the  Tarrant  build- 
ing itself,  these  people  being  wholesale  druggists.  After  burning 
an  hour  or  so,  the  fire  reached  a  large  stock  of  explosive  drugs  and 
chemicals  and  an  explosion  resulted.  The  effects  of  this  were  so 
terrible  that  all  the  neighboring  buildings  were  wrecked,  and  in 
the  case  of  one  of  these  buildings,  litigation  ensued,  the  Insuring 
Company  taking  the  ground  that  the  building,  was  destroyed  by  ex- 
plosion and  not  by  fire.  The  building  in  question  was  over  fifty 
feet  away  from  the  Tarrant  Building;  there  were  other  buildings 
between  it  and  the  buiUling  in  which  the  fire  originated,  and  also  a 
narrow  street.  Both  of  the  intervening  buildings  were  blown  down 
by  the  explosion  and  the  ruins  of  them,  as  well  as  of  the  building 
over  which  litigation  was  pending,  were  completelv  burned.  In 
this  particular  case  the  lower  Court  found  for  the  owner  on  the 
ground  that  his  building  was  wrecked  by  an  explosion,  but  that  a  fire 
was  the  cause  of  the  explosion,  and  that,  therefore,  the  Insuring 
Company  was  liable.  On  an  appeal,  the  higher  Court  re\ersed  this 
decision  and  held  that  the  loss  was  bv  explosion,  not  bv  fii"e,  and 
that,  therefore,  under  the  provision  in  the  standard  policv,  the  Insur- 
ing Company  was  not  liable.  Probably  I  ha\e  said  enough  about 
these  special  emergencies  to  cause  you  to  realize  that  the  working 
out  of  clauses  that  may  be  designed  to  guard  against,  or  to  provide 
for  them,  are  extremely  uncertain  as  to  their  outcome. 


VII. 

CLAUSES  OF  DISTRIBUTION  AND  OF  LIABILITY 
LIMITATION. 

No  class  of  clauses  in  common  use  with  fire  insurance  policies 
are  so  essential,  and  at  the  same  time  so  much  the  subject  of  criti- 
cism, as  those  that  are  designed  to  define  in  an  equitable  manner 
the  extent  of  the  liability  of  the  Insuring  Company  and  at  the  same 
time  place  the  contract  on  such  a  footing  that  its  proper  cost  or  rate 
can  be  determined.  By  Distribution,  and  Liability  Limitation,  we 
mean  clauses  like  the  following:  the  Three-Fourths  Value  Clause; 
the  Three-Fourths  Loss  Clause  :  the  A^•erage  Clause  ;  and  the  Co-in- 
surance, or  Reduced  Rate  or  Assessed  \"alue  Clause,  these  last  three 
names  applying  to  one  and  the  same  proyision. 
Three-fourths  Taking  up  in  the  order  named  the  yarious  clauses  mentioned, 

Value  Clause. -vve  ^yill  refer  briefly  to  the  Three-Fourths  Value  Clause.      The  or- 
dinary form  of  this  is  substantially  the  following:  — 

"  Three-Fourths  Value  and  Limitation  Clause. 
It  is  a  part  of  the  consideration  of  this  policy,  and  the  basis 
upon  which  the  rate  of  premium  is  fixed  that  in  the  eyent  of 
loss,  this  company  shall  not  be  liable  for  an  amount  greater 
than  three-fourths  of  the  actual  cash  yalue  of  the  property  coy- 
ered  by  this  policy  at  the  time  of  such  loss  ;  in  case  of  other 
insurance  (consent  to  which  must  in  all  cases  be  indorsed  hereon) 
the  company  shall,  whether  policies  are  concurrent  or  not,  be 
liable  for  only  its  pro  rata  proportion  of  such  three-fourths 
value." 

You  will  note  that  the  title  of  this  clause  is  that  of  Three-Fourths 
Value  and  Limitation.  You  will  also  note  that  the  attachment  of  a 
clause  of  this  character  forms  a  part  of  the  consideration  that  enters 
into  the  tixing  of  the  rate  on  properties  to  which  it  is  applied. 
With  such  a  clause  the  rate  can  be  materially  reduced  because  as  the 
clause  distinctly  states,  "the  company  shall  not  be  liable  for  an 
amount  greater  than  three-fourths  of  the  actual  cash  \alue."  Also, 
in  the  event  of  there  being  insurance  in  more  than  one  company, 
this  same  three-fourths  of  the  tot;d  sound  \alue  must  be  regarded  as 


MISCELLANEOUS  CLAUSES  367 


the  total  insurable  \alue  of  the  property  at  the  time  the  loss  occurs, 
and  the  Insurance  must  pro  rate  u]5on  that  basis. 

While  this  clause  is  emphatically  one  of  limitation,  its  prime 
object  is  to  compel  the  assured  to  carry  a  part  of  the  risk  himself, 
and  it  also  very  effectively  does  away  with  any  possibility  of  gain 
coming  to  him  by  means  of  over  insurance.  It  is  a  clause  that  is 
especially  applicable  in  classes  of  risks  \\  here  the  a\erage  of  loss 
has  been  unduly  high,  and  yet  where  proper  care  and  supervision  on 
the  part  of  the  assured  would  probably  have  prevented  a  great 
number  of  these  losses.  Possibly  the  most  notable  class  of  risks 
that  ha^  e  been  subjected  to  the  attachment  of  this  clause  are  the 
Paper  Mills  of  the  earlier  days,  where  losses  were  so  frequent,  and 
the  insurance  regarded  as  so  undesirable  by  insurers,  that  the  com- 
panies, as  a  matter  of  self-preservation,  found  it  necessary  to  attach 
a  clause  of  this  nature  to  the  policies  to  prevent  an  excessive  loss 
ratio  from  the  class.  Clatises  of  this  nattire  were  among  the  first 
that  were  designed  to  make  the  insured  a  sharer  in  carrying  the 
burden  of  his  own  fire  loss.  They  tend  to  reduce  the  moral  hazard 
and  make  imperative  the  care  and  protection  that  the  assured  always 
should  exercise. 

The  next  clause  that  we  listed  is  called  the  Three-Fourths  Loss   Three- 
Clause.     A  clause  of  this  nature  is  one  that  limits  the  liability  of   fourths  Loss 
the  Insuring  Companies  to  three-fourths  of  the  total  loss  sustained,    Clause, 
and  in  this  way  makes  the  assured  carry  a  part  of  his  own  risk  in 
much  the  same  manner  that  the  Three-Fourths  Value  Clause  does. 
Neither  of  these  clauses  are  in  as  common  use  to-day  as  they  for- 
merly were,  since  the  classes  of  property  to  which  they  are  more 
directly  applicable  are  now  largely  under  the  protection  of  automatic 
sprinklers   and  are   subject  to  the  Co-insurance  or  Reduced    Rate 
Clause. 

By  far  the   mtn-e  important  part  of  this  discussion  should  be    Average 
directed  to  the  so-called  A\erage  Clause  and  the  Co>- insurance  Clause,    and  Co- 
The  use  of  the  word  "  Average  "  in  connection  with  clauses  attached  insurance, 
to  policies  of  insurance,  appears  to  be  a  varying  one  in  different 
localities.      In    this    country    we   uniformly,   I    believe,   regard   an 
A\erage  Clause  as  one  that  distributes  the  liability  of  the  Company 
by  apporiioning,  under  some  prescribed  rule,  just  what   part  of  the 
insurance  shall  apply  in  any  specified  locality,  or  on  any  specially 
defined  property.      In  this  way  it  becomes  to  a  certain  extent    a 
Distribution  Clause.      In  contrast  to  this  definition  of  what  we  mean 
by  an  Average  Clause,  is  one  that  olnains  to  some  extent  in  countries 


368  LECTURES  ON  FIRE  INSURANCE 

where  the  same  meaning  is  gi\en  to  the  term  "Average"  that  we 
apply  to  a  Clause  of  Full  Co-insurance,  or,  that  is.  what  we  would 
term  a  100%  Clause. 

Before  we  discuss  these  differences  it  will  be  best  for  us  to  quote 
each  one  of  these  clauses  as  they  are  commonh-  applied  in  this 
country.  The  Average  Clause  reads  as  follows,  and  is  applicable 
to  blanket  or  compound  forms  of  insurance  : — 

The  Average  "  This  policy  to  attach  in  each  building  or  locality  in  pro- 

Clause,  portion  as  the  value  in  each  bears  to  that  in  all." 

Now  to  illustrate,  let  us  suppose  that  a  policv  for  $9,000  was 
written  covering  merchandise  contained  in  three  different  buildings 
and  written  with  an  average  clause.  At  the  time  of  a  fire  in  build- 
ing No.  2,  it  was  found  that  building  No.  1  contained  merchandise 
to  a  value  of  $5000,  No.  2  $4000,'  No.  3  $3000,  or  that  is,  all  of 
the  three  buildings  contained  stocks  to  a  total  value  of  $12,000. 
Under  these  conditions,  one-third  of  the  policy  of  $9,0.00,  or  that  is 
$3,000,  would  be  the  insurance  covering  directly  in  No.  2,  the 
burned  building,  because  4000/  12000  equals  one-third.  This  illus- 
tration certainly  makes  it  appear  that  the  Average  Clause  is  a  Clause 
of  Distribution,  and  it  also  is  a  Clause  of  Limitation,  since  it  fixes 
the  limit  under  which  an}^  policy,  or  policies,  can  be  made  liable 
in  any  one  particidar  place,  or  on  any  one  specified  property. 
TheCo-insur-  Before  we  speak  more  fully  of  the  difference  in  its  limiting 

ance  Clause,  features  between  the  Average  and  the  Co-insurance  or  Reduced  Rate 
Clause,  let  us  quote  the  latter.  The  form  in  general  use,  as  you 
know,  reads  like  this  :  — 

"  In  consideration  of  the  reduced  rate  at  which  this  policy 
is  written,  it  is  expressly  stipulated  and  made  a  condition  of  the 
contract  that  in  event  of  loss  this  Company  shall  be  liable  for 
no  greater  proportion  thereof  than  the  amount  hereby  insured 
bears  to per  cent  of  the  actual  value  of  the  property  de- 
scribed herein,  at  the  time  when  such  loss  shall  happen,  nor  for 
more  than  the  proportion  which  this  policy  bears  to  the  total 
insurance  thereon;  provided,  however,  that  if  the  aggregate 
claim  for  any  loss  shall  not  exceed  5%  of  such  actual  value 
no  special  inventory  or  appraisement  of  the  undamaged  prop- 
erty shall  be  required. 

If  this  policy  be  divided  into  two  or  more  items,  the  fore- 
going conditions  shall  apply  to  each  item  separately,  and  if  two 
or  more  buildings  or  their  contents  be  included  in  a  single  item, 
the  application  of  the  provision  as  to  special  inventory  or 
appraisement  shall  be  limited  to  each  building  and  its  contents." 


MISCELLANEOUS  CLAUSES  369 

It  is  claimed  by  some  that  this  Co-insurance  Clause  is  not  only 
a  Cause  of  Limitation,  but  that  it  is  also  one  of  distribution,  the 
contention  being  based  on  the  words,  "  nor  for  more  than  the  pro- 
portion which  this  policy  bears  to  the  total  insurance  thereon,"  it 
being  argued  that  in  the  case  of  a  blanket  policy  covering  several 
properties,  that  when  a  loss  occurs  on  some  one  of  these  properties 
on  which  there  is  specific  insurance  covering  only  on  that  one,  that 
the  presence  of  a  Co-insurance  Clause  virtuallv  fixes  the  part  of  the 
blanket  policv  that  can  be  assessed  under  conditions  such  as  we 
have  described :  the  contention  being  that  the  words,  "  nor  for 
Tiiore  than  the  proportion  which  this  policy  bears  to  the  total  in- 
surance thereon,"  being  equivalent  to  the  Average  Clause  in  divid- 
ing the  blanket  policy  into  specific  parts  instead  of  the  entire  blanket 
policy  being  liable  to  be  called  upon  to  contribute  on  any  one  or  all 
of  the  properties  on  which  it  covers. 

The  general  interpretation,  however,  of  this  portion  of  the 
Reduced  Rate  Clause  that  we  are  speaking  of  is  the  reverse  of  this, 
and  simply  limits  the  maximum  for  which  the  policy  carrying  this 
Clause  can  be  liable  in  the  same  way  that  the  Limitation  Clause  in 
the  standard  policy  contract  limits  the  liability  on  any  one  policy 
by  the  use  of  the  words,  in  the  Massachusetts  policy,  "  that  if  there 
shall  be  anv  other  insurance,  the  insured  can  recover  on  this  policy 
no  greater  proportion  of  the  loss  sustained  tiian  the  sum  hereby 
insured  bears  to  the  whole  amovuit  insured  thereon."  Substantially 
the  New  York  Standard  policy  Limitation  Clause  is  the  same,  only 
as  is  usual  in  the  New  York  Form,  it  is  more  explicit  and  goes 
further  into  details  in  defining  the  nature  and  extent  of  this  liability. 
This  makes  the  entire  blanket  insurance  assessable  on  its  full  face 
for  contribution  for  loss  on  anv  one  of  the  properties  to  which  it 
may  applv. 

To   me  it  seems  clear  that  the  Average  Clause  is  a  clause  of  Average 

both  Distribution  and  Limitation  ;    of  distribution  in  that  it  appor-  Clause  is  one 

tions  the  amount  of  insurance  that  is  applicable  to  any  particular  °      '^  "  "" 

,  .  ,,,...        .       ,         ,        ,.,..,.         r  .  tion  and 

sumect :   and  of  imiitation  \n  that,  bv  this  chstribution,  it  states  uist  t  .    .... 

J  '     '  ,  /  ,  Limitation, 

what  portion  of  the  total  policy  can  be  assessed  in  one  loss.     While  Co-insurance 
the  Co-insurance  clause  is  purely  a  Clause  of  Liability  Limitation,  is  one  of 
in  that  it  fixes  definitely  the  amount  for  which  the   insuring  com-  Limitation 
pany  can  be  liable  with  reference  to  conditions  of  sound  \alue,  loss  °"  ^* 
and  amount  of  insurance  carried.     This  almost  always  causes  the 
lilanket  insurance  to  suffer  where  there  are  both  specific  and  blanket 


370  LECTURES  ON  HRE  INSURANCE 

policies  covering  on  the  same  group  of  properties  and  only  a  por- 
tion of  the  group  is  damaged  by  a  fire. 

Another  form  of  so-called  Average  Clause  in  use,  especially  in 
connection  with  lumber  insurance,  reads  as  follows  :  — 

"It  is  understood  and  agreed  that  no  claim  under  this 
policy  shall  be  for  a  greater  proportion  of  the  whole  loss  or 
damage  to  the  property  insured  thereby  than  the  amount  in- 
sured thereby  shall  bear  to  tlie  whole  value  of  the  property 
insured  at  the  time  of  the  tire." 

This  form  of  Average  Clause  may  be  said  to  also  possess  cer- 
tain of  the  limitation  features.  In  fact,  in  its  effect  on  the  recovery 
at  the  time  of  a  loss  it  would  operate  in  much  the  same  way  that  a 
Three-Qviartcrs  \'alue  Clause  would,  although  based  on  a  different 
principle. 
Essential Fea-  The  Co-insurance   Clause   is  vastly   more  essential   to  proper 

ture  of  Co-  underwriting  than  the  majority  of  the  people  using  it  begin  to  rea- 
lize. Possibly  a  word  or  two  in  justification  of  this  Clause  may 
not  be  amiss  here,  since  it  is  the  subject  of  such  general  criticism. 
That  it  is  a  necessity  is  evidenced  by  the  fact  that  a  good  many 
years  ago  in  England  an  Act  was  passed  by  which  parties  taking 
out  insurance  were  obliged  to  place  a  lixed  amount  upon  each  sepa- 
rate building  or  contents  item,  or  where  the  fixing  of  such  an 
amount  was  not  practicable  on  account  of  the  stock  being  of  a 
movable  character,  changing  its  location  from  time  to  time,  or,  if 
from  any  other  cause,  and  the  insurance  was  in  one  sum  over  all, 
the  insured  in  such  cases  was  only  to  recover  pro  rata  for  any  dam- 
age in  the  proportion  that  the  insurance  on  the  damaged  property, 
at  the  time  of  the  fire,  bore  to  the  whole  value  of  the  insured  prop- 
erty. It  is  nearly  one  hundred  years  since  this  position  was  taken 
up  and  legalized  by  English  statute,  but  you  can  see  that  it  recog- 
nized the  principle  that  there  was  a  relation  between  insurance 
carried  and  sound  value  of  property  coyered,  that  must  be  to  some 
extent  a  definitely  fixed  relation,  in  order  to  have  the  business  of 
underwriting  placed  upon  a  sound  economic  basis,  and  to  enable 
insurers  to  know  what  to  charge  for  their  policies. 

(^uite  a  common  opinion  regarding  co-insurance,  you  know,  is 
that  it  is  unreasonable  and  unjustifiable,  and  that  if  we  are  willing 
to  insure  a  man  for  $1,000,  it  should  make  no  difference  whatever 
to  us  whether  the  property  that  we  insure  him  against  the  loss  of 
was  worth  $1,000  or  $5,000  or  $10,000.  This  is  the  popular 
argument  against  co-insurance,  the  assured  oftentimes  maintaining 


MISCELLANEOUS  CLAUSES  37J 

that  it  should  make  no  difference  to  us  if  we  are  wilHng  to  run 
$1,000  worth  of  risk  on  his  property,  as  to  what  the  value  of  that 
property  was,  so  long  as  under  anything  but  a  valued  policy  there 
was  at  least  $1,000  worth  of  it  in  existence?  But  think  a  moment. 
In  the  case  of  a  $5,000  property  with  $1,000  thereon,  and  a  20% 
property  loss,  there  is  a  total  loss  for  the  company ;  in  the  case  of 
$10,00<»  property  value  with  the  same  $1,000  insurance  thereon, 
and  a  10%  loss,  a  total  loss  for  the  company  again.  In  other 
words,  since  the  great  majority  of  losses  (probably  upwards  of 
90%  of  them)  are  not  total  losses,  and  among  this  90%  of  partial 
claims  are  losses  ranging  e\ery where  from  fractions  of  1%  up  to 
99%,  of  the  insured  property,  the  great  majority  of  them  being 
under  10%,  or,  at  the  most,  20%  in  extent,  the  company  writing  a 
small  line,  such  as  we  ha\e  spoken  of  on  a  property  of  high  value, 
stands  lial)le,  in  the  great  majority  of  the  losses  that  may  occur,  to 
have  them  prove  total  losses,  rather  than  partial  ones.  To  take  the 
illustration  of  a  property  insured  for  10%  of  its  value,  there  is 
vastly  more  than  ten  times  the  liability,  on  the  part  of  the  Com- 
pany, to  sustain  a  total  loss  than  there  would  he  if  the  assured  was 
carrving  insurance  up  to  approximately  the  value  of  the  property 
covered. 

Another  pet  argument  advanced  by  people  who  object  to  the 
Co-insurance  Clause  is,  for  illustration,  "  Why,  I  am  perfectly 
willing  to  carry  half  mv  risk  myself."  After  many  years  of  expe- 
rience, and  many  times  asking  the  assured,  "  Well,  in  that  e\ent, 
suppose  half  your  risks  burns;  whose  half  is  it,  yours  or  the  Insur- 
ance Company's?"  His  answer  invariably  has  been,  ''The  Insur- 
ance Company's,  of  course."  Does  it  require  any  very  keen  logic 
to  show  that  a  position  like  that  absolutely  refutes  the  idea  of  the 
assured  carrying  half  of  the  risk  himself.  Only  would  such  a  de- 
fined position  on  his  part  be  lived  up  to  if  he  were  ready  to  agi"ee 
that  half  of  every  loss  sustained  should  be  borne  by  him,  and  the 
other  half  paid  bv  the  Insuring  Company.  Were  the  assured  will- 
ing, as  a  general  proposition,  to  have  a  clause  defining  such  an 
apportionment  as  this  attached  to  the  policies,  I  have  but  little 
doubt  but  what  the  Insurance  Companies  would  very  gladly  accede 
to  it,  and  that  the  fire  waste  of  the  country  would  be  reduced  by  a 
very  large  amount. 

The  onl}'  way  to  secure  a  provision  of  this  nature  in  the  policy 
and  to  oblige  ihe  assured  to  live  up  to  an  agreement  to  cany  part 
of  his  risk  himself,  in  fact  as  well  as  in  name,  is  to  so  draft  the 


372  LECTURES  ON  FIRE  INSURANCE 


contiMct  that  for  :i  certain  consideration  granted  by  the  insuring 
company,  the  assured  agrees  to  carry  insurance  to  an  amount  bear- 
ing a  certain  fixed  relation  to  the  value  of  the  property  insured 
under  the  policy  at  the  time  of  the  fire.  This  means  that  the  in- 
sured becomes  an  insurer  of  his  own  property  in  case  he  has  not 
taken  out  sufficient  insurance  to  reach  the  proportion  of  his  sound 
value  called  for  by  the  contract ;  in  other  \\-ords,  he  becomes  a 
"  co-insurer." 

The  consideration  granted  by  the  Insuring  Companv  for  the 
attachment  of  a  clause  warranting  this  condition,  is  a  material  reduc- 
tion in  the  rate.  Hence,  all  co-insurance  or  reduced  rate  clauses 
commence  with  the  words,  "In  consideration  of  the  reduced  rate 
at  which  this  policy  is  written." 

Then  follows  the  reason  why  this  reduced  rate  is  granted, 
stated  in  these  words,  "It  is  expressly  stipulated  and  made  a  part 
of  this  contract  that  in  event  of  loss  this  company  shall  be  liable 
for  no  greater  proportion  thereof  than  the  amount  herebv  insured 

bears  to per  cent  of  the  actual  ^  alue  of  the  property 

described  herein  at  the  time  when  such  loss  shall  happen."  This, 
you  note,  is  practically  an  agreement  or  warrant  on  the  part  of  the 
assured  to  carry  the  specified  proportion  of  the  \  alue  of  his  prop- 
erty in  insurance.  But  it  does  not  stop  there,  for  it  further  stipu- 
lates that  only  such  proportion  of  his  loss  as  is  represented  by  the 
ratio  existing  between  the  amount  of  insurance  carried  by  any  com- 
pany and  this  specified  percentage  of  the  \  alue  of  the  insured  prop- 
erty can  be  collected  from  that  company.  The  working  of  this 
ratio  is  to  call  for  a  total  contribution  by  the  insuring  companies 
whenever  there  is  short  insurance  and  a  loss  greater  than  the  speci- 
fied per  cent  of  the  property  value.  The  operation  of  the  clause 
is  not  altered,  but  no  saving  to  the  insurance  companies  is  effected 
by  its  attachment. 
The  5  %  Pro-  The  final  provision  of  the  Co-insurance  Clause  is  one  that  is 

vision  of  the  often  misinterpreted.      I  refer  to  the  so-called  hfj,  item.      The  por- 
Co-insurance  ^^Jq^i  of  the  clause  regarding  this  reads  :   "If  the  agforegfate  claim 
for  any  loss  shall  not  exceed  5*^   of  such  actual  value,  no  special 
in\entory   or   appraisement   of   the    undamaged   propertv   shall   be 
required." 

Frecjuently  inexperienced  adjusters  interpret  this  as  meaning, 
that  with  losses  of  less  than  .5%  of  the  actual  sound  \alue,  this 
wai\cs  the  main  proN  ision  of  the  Co-insurance  Clause,  that  which 
makes  the  insured  a  contributor  to  his  own  loss,  if  he  is  short  of 


MISCELLANEOUS  CLAUSES  373 

the  required  percentaj^e  of  insurance.     This  is  not  so  ;   the  Clause 

clearly  makes  no  waiver  of  this  sort,  and  a  1%  or  a   5%  loss  is  as 

fully  subject  to  the  working-  of  the  Clause  as  one  of  greater  amount. 

Its  object  is  simply  to  do  away  with  the  requiring  of  a  detailed 

inventory    or   appraisement   in    case    of    these    small    claims    which 

might  otherwise  be  required. 

It  would  seem  singular,  were  it  not  for  the  fact  that  State  Leg-   The  Blind 

islaturcs   ha\  e  o^  er  and    o\er  again    e\idenced    their    inability  to   ^"° 

understand  insurance  problems,  that  certain  of  the  States  absolutely    ^^^^  ^*^ 
,  .,  .  ,.         \   .  .  .  ,     o  Attitude 

prohibit  any  policy  of  insurance  covering  property  in  such  htate   ^£  c^.^^ 

which  shall  contain  any  provision  recpiiring  the  assured  to  take  out   Govts. 

any  specified  amount  of  insurance  with  respect  to  the  value  of  his 

property,  or  that  shall  render  him  liable  as  to  co-insurance  in  the 

event  of  his  not  taking  out  a  sufficient  amount  of  insurance.     .Such 

action  on  the  part  of  any  State  necessarily  materially  increases  the 

cost  of  insurance  to  the  people  of  that  State. 

Now  what  are  some  of  the  real   reasons  wh}-  the  Co-insurance   Xhe 
Clause  is  such  an  essential  factor  in  the  business?     It  is  absolutel}'   Reasons 
necessary  that  underwriters   should  have  a  suthcient   amount  of  in-    'O*"  Co-insur- 
surance,  with  respect  to  the  \alue  of  the  property  covered,  to  a\  oid   ^*^"* 
the  continual    payment  of  what    are    in    reality  only  damages,  or 
partial  losses,  but  which  in  effect,  owing  to  short  insurance,  become 
total  losses.      On  no  other  basis  than  that  of  a  fixed  relation  between 
insurance  carried  and  sound  value  of  the  property  insured  is  it  pos- 
sible for  the  cost  of  insurance,  or  that  is,  the  rate,  to  be  determined 
with  any  fair  amount  of  accuracy.      It  would  be  obviously  unjust  to 
a  man  who  was  carrying  insurance  to  the  extent  of  90 "y^  or  100 (y^ 
of  the  value  of  his  property,  to  ask  him  to  pay  the  same  price  per 
dollar  for  such  insurance  as  his  neighbor,  the  owner  of  precisely 
identical  property  both  in  value  and  physical  condition,  but  who  only 
carried  half  as  much  insurance,  since  the  risk  to  the  companies  in  the 
former  case  is  reduced  over  one-half  from  what  it  is  in  the  latter. 

It  is  just  as  essential,  in  order  to  properly  assess  the  cost  of  in- 
surance, that  is,  to  fix  the  tax  or  rate  that  the  companies  must  receive 
in  order  to  collect  funds  suflicient  to  carry  on  their  business,  that  the 
relation  of  insurance  to  value  should  be  considered,  as  well  as  the 
various  physical  features  of  the  insured  property  that  enter  into  the 
original  making  up  of  the  rate.  We  all  know  by  experience  that 
a  low  rate  with  a  proper  co-insurance  clause  is  in  the  long  run  more 
profitable  than  a  materially  higher  rate  and  absence  of  the  Co-insur- 
ance Clause  and  a  consequent  light  carrying  of  insurance. 


374  LECTURES  ON  nRE  INSURANCE 

It  has  often  seemed  to  mc  that  the  opponents  of  the  Co-insur- 
ance principle  wei-e  men  who,  to  put  it  phiinly,  were  prepared  to 
kick  because  thev  dithi't  receive  something;  that  they  hadn't  paid  for. 
Really,  this  crude  description  sums  it  all  up.  Objectors  to  co-insur- 
ance are  mainly  men  who  saw  ht  to  carry  a  part  of  the  risk  them- 
selves, as  thev  were  pleased  to  term  it,  up  to  the  time  when  a  loss 
occurred,  then  they  immediately  abandon  the  idea  that  they  are  in 
any  way  responsible,  and  insist  that  the  Insuring  Company  should 
pay  them  for  something  that  they  had  not  bargained  for  in  the  first 
place.  From  any  point  of  view  the  co-insurance  principle  is  a  right 
one,  not  only  from  the  standpoint  of  the  Insurance  Companies,  since 
it  defends  them  from  an  excessive  nvmiber  of  total  losses  and  enables 
them  to  determine  more  closely  the  cost  price  of  their  commodity, 
but  the  fair  minded  policy  holder  should  also  regard  it  as  a  friendly 
clause  ;  friendly  to  his  interest,  since  it  works  distinctly  against  the 
speculative  and  avaricious  claimant,  whose  action  causes  an  added 
burden  for  the  Insurance  Companies  and  thereby  increases  the  cost 
price  of  insurance  to  the  community  as  a  whole. 
Comments  on  It  is  interesting  to  note  the  way  in  which   the  Co-insurance 

the  Co-insur-  principle  appears  to  men  of  trained  minds  who  have  had  no  actual 
ance  Prin-  experience  in  the  insurance  business,  since  it  brings  out  an  unbiased, 
"^^*  logical  presentation  of  the  situation.     I  am  glad  to  take  this  oppor- 

tunity to  quote  from  several  short  essays  that  were  written  by 
members  of  the  Fire  Insurance  Class  in  the  Graduate  School  of 
Business  Administration  of  Harvard  Uni\  ersity  during  this  past 
season.  These  extracts  are  from  five  different  papers  that  were 
presented  on  the  Co-insurance  Clause.  The  papers  are  not  persented 
in  full,  but  the  more  inportant  portions  of  them  are  as  follows  :  — 

•'The  Co-Insurance  principle  is  absolutely  necessar\-  to 
secure  justice  between  property  owners,  and  to  enable  the  com- 
pany to  collect  premiums  from  all  commensurate  with  the  risk 
assumed.  It  is  a  well  known  fact  that  in  cities  with  good  fire 
protection  onlv  about  one  out  of  every  twenty-five  fire  losses  is 
a  total  one,  many  of  the  remaining  losses  being  only  nominal 
in  amount. 

"The  Co-insurance  Clause  provides  that  every  property 
owner  shall  have  his  losses  paid  only  in  the  pro])ortion  that  he 
is  willing  to  pay  premium. 

"•Fire  insurance  is  a  tax  paid  by  all  the  property  owners 
of  the  communitv  for  the  purpose  of  indemnifying  unfortunate 
losers.  In  form  it  resembles  a  general  property  tax,  except 
that  it  is  collected  and  disbursed  by  private  companies  instead 


MISCELLANEOUS  CLAUSES  375 


of  by  the  government.  As  the  government  tax,  to  be  equitable, 
is  paid  by  the  owners  of  property  in  proportion  to  the  \  ahie  of 
the  same,  so  the  fire  insurance  tax,  to  be  equitable,  should  also 
be  based  upon  the  value  of  the  property  owned. 

"The  Co-insurance  Clause  protects  the  small  property 
owners  against  the  efforts  of  the  great  industrial  and  mercantile 
corporations  to  shirk  the  payment  of  their  just  share  of  pre- 
miums. In  most  large  mercantile  plants  the  property  is  so 
situated  in  different  localities  each  separate  from  the  other  or 
by  fireproof  walls  that  in  a  great  majority  of  cases  the  fire  can 
be  easily  confined  and  under  such  circumstances  a  total  loss  is 
hardly  to  be  expected.  Therefore  the  large  concerns  could 
protect  themselves  against  fire  loss  by  insuring  a  portion  of 
their  value  while  a  small  concern  would  have  to  insure  for 
nearl}'  full  value  for  equal  protection.  The  only  argument  I 
can  see  against  the  use  of  the  Co-Insurance  Clause  is  that  a  pro- 
perty owner  insuring  for  a  small  percentage  of  his  value  may 
claim  that  in  event  of  total  loss  he  is  taking  a  large  proportion 
of  the  risk  himself,  and  therefore  in  event  of  a  small  loss  should 
be  paid  in  full.  If  his  property  was  so  situated  that  in  e\ent 
of  a  fire  the  entire  property  would  be  seriously  endangered  a 
claim  like  this  would  be  just,  and  there  is  no  doubt  but  what 
the  moral  hazard  would  beO.  K.  as  the  owner  would  naturally 
take  all  precautions  to  guard  against  possible  loss." 

"  Fire  insurance  is  a  tax  and  like  all  taxes  should  be  assessed 
in  proportion  to  the  value  of  the  property  protected  by  it. 
The  absence  of  co-insurance  makes  it  possible  for  the  large 
corporation  and  the  property  owner  who  wants  to  keep  a  small 
insurance  to  take  advantage  of  the  small  property  owner  who 
will  not  take  the  risk  of  only  partly  insuring  his  property. 
Experience  has  shown  that  the  fire  loss  averages  around  60% 
of  the  premiums  collected,  and  those  premiums  must  be  col- 
lected if  the  insurance  company  is  to  do  luisiness.  If  the  large 
corporations  will  not  pay  them,  the  obligation  falls  upon  the 
scrupulous  property  owner,  which  is  manifestly  unfair.  The 
Co-insurance  Clause  (N.  Y.  policy)  provides  that  the  company 
shall  not  be  liable  for  a  greater  proportion  of  loss  than  the 
amount  of  the  insurance  bears  to  the  per  cent  of  actual  value  of 
the  property.  Most  of  the  losses  are  comparatively  small  in 
amount,  not  being  over  $100.00  or  $200.00.  Without  co-in- 
surance people  would  only  take  out  insurance  to  a  small  amount, 
the  companies  would  have  to  pay  all  losses  in  full  and  many 
would  be  forced  to  the  wall.  For  instance,  two  people  each  own 
buildings  worth  $10,000,  one  insuring  for  $8,000  and  the  other 
for  $2,000,  the  rate  being  the  same  in  both  cases.  If  each 
suffers  a  loss  of  $2,000  they  are  both  paid,  but  one  has  been 
taxed  four  times  as  much  as  the  other,  and  has  received  no 
more.  Thus  it  is  seen  that  co-insurance  protects  the  interests 
of  the  man  who  is  unwilling  to  take  the  risk  of  partial  insur- 


376  LECTURES  ON  FIRE  INSURANCE 


ance.  In  the  case  mentioned  the  man  insuring  for  $2,000  shouUl 
be  allowed  to  collect  only  one  fourth  of  his  loss,  or  $500.00. 
In  most  places  the  company  requires  the  owner  to  insure  for 
80%  of  the  value,  and  in  case  of  total  loss  the  owner  is  co- 
insurer  to  the  amount  of  20 f;^." 

"  The  owner  of  propeity  is  not,  however,  alwavs  obliged 
to  carry  80%  insurance.  He  may  carry  less,  but  he  must  pay 
a  higher  graded  premium.  Co-insvirance  also  decreases  the 
moral  hazard. 

"  The  only  objections  that  can  be  raised  against  co-insur- 
ance are  that  it  puts  an  obligation  on  the  insurer  to  carry  a 
certain  amount  of  insurance,  and  where  the  80%  co-insurance 
clause  is  the  practice,  it  makes  it  impossible  for  the  property 
owner  to  secure  full  indemnity  in  case  of  complete  loss.  The 
first  of  these  objections  has  been  practically  removed  by  the 
graded  premium.  The  second  will  appeal  chiefly  to  unscrup- 
ulous property  owners." 

"  The  foremost  argument  in  favor  of  the  adoption  of  the 
Co-insurance  Clause  is  that  it  is  in  accordance  with  the  law  of 
average,  which  is  the  basic  principle  of  insurance.  If  the 
principle  were  adopted  that  every  one  must  insure  his  property 
to  a  certain  proportion  of  its  actual  cash  value,  or  receive  in 
case  of  loss  only  such  proportion  of  the  loss  as  the  amount  in- 
sured bears  to  the  full  value  of  the  property,  then  the  ratio  of 
losses  to  amounts  written  or  to  premiums  in  a  certain  class 
would  be  a  reliable  basis  from  which  an  average  rate  would 
be  justly  and  correctly  arranged.  No  one  assured  w^ould  re- 
ceive any  greater  protection  for  each  dollar  of  valued  assured 
than  any  other.  Yet  vmder  the  present  conditions,  that  is 
where  the  Co-insurance  Clause  is  in  onlv  partial  use;  the 
losses  in  its  absence  are  in  larger  proportion  to  premiums  and 
values  insured  and  the  cost  of  insurance  is  increased  to  those 
who  carry  full  or  nearly  full  insurance,  whereas  the  cost  is  re- 
duced for  those  who  insure  but  a  part  of  their  property  and 
vet  get  protection  up  to  the  full  amount  insured. 

"  Manifestlv  this  arrangement  of  the  insurance  tax.  for  it 
is  virtuallv  a  tax,  is  unfair.  The  cost  of  insurance  is  just  as 
much  a  tax  as  is  that  le\ied  by  the  go\ernment  on  property. 
And  does  the  government  allow  the  citizen  to  pay  on  just  what 
proportion  of  his  total  property  he  desires  to?     Certainly  not." 

''  Suppose,  for  the  sake  of  illustration,  the  assessment 
system  of  levving  taxes  were  abolished.  Now  '  A  '  decides  to 
pay  taxes  on  75%  of  his  property,  '  B  '  on  50%  and  so  on.  The 
equality  of  taxation  would  be  absolutely  destroyed,  and  the 
government  could  get  no  idea  how  much  to  make  the  tax 
rate  in  order  to  raise  the  necessary  fluids.  And  the  case  of  in- 
surance is  preciselv  analogous  to  this. 

''  Were  insurance  conducted  by  the  government,  it  would 
very  cjuickly  be  true  that  losses  antl  expenses  would  be  assessed 


MISCELLANEOUS  CLAUSES  377 


against  the  insurance  taxpayer  in  precisely  the  same  manner 
as  taxes  —  that  is,  upon  the  full  assessed  vakie  of  property  so 
protected. 

"  The  fact  that  such  an  immense  corporation  as  the  United 
States  Steel  objected  to  the  Co-insurance  stipulation  when  it 
insured  in  private  companies,  yet  when  insuring  its  own  prop- 
erty demanded  that  each  plant  contribute  to  the  general  fund 
in  proportion  to  the  full  value  of  that  plant,  showed  that  they 
recognized  clearly  the  principle  of  Co-insurance  and  appre- 
ciated its  value. 

"  The  probable  effect  of  the  adoption  everywhere  of  the 
Co-insurance  principle  is  also  a  strong  argument  in  favor  of 
its  use. 

"  In  two  ways  the  average  rate  would  be  reduced.  First, 
because  larger  sums  would  be  paid  the  companies  for  premiums 
and  thus  the  average  loss  rate  would  be  reduced  ;  second,  be- 
cause in  many  cases  the  liabilitv  of  the  companies  would  be 
reduced. 

''  To  my  mind  the  arguments  in  favor  of  Co-insurance 
clause  are  far  more  convincing  than  those  against  it.  Person- 
ally, 1  belie^e  the  Co-insurance  or  Reduced  Rate  clause  to  be 
a  benefit  to  the  community  at  large.  These  are  my  reasons. 
In  a  pre\ious  lecture  we  learned  that  the  '  Loss  Cost '  of  an 
insurance  company  is  the  amount  that  burns  for  every  $100.00 
insured ;  or  better,  it  is  the  ratio  between  the  amount  burned 
and  the  amount  insured.  In  the  same  lecture  we  learned  that 
the  'Loss  Ratio' of  an  insurance  company  is  the  ratio  between 
the  losses  incurred  and  the  premiuins  received.  Now  it  is 
not  ditlicult  for  one  looking  at  the  Co-insurance  clause  to 
realize  that  if  it  were  strictly  lived  up  to,  both  the  Loss  Cost 
and  the  '  Loss  Ratio '  of  the  insurance  companies  would  tend 
to  diminish,  because  the  companies  would  be  writing  larger 
policies,  thereby  receiving  larger  premiums  and  consecjuently 
the  ratios  would  be  smaller.  This  will  be  clearer  when  we 
realize  that  insurance  losses  are  governed  by  the  law  of  average. 
It  is  not  logic  to  maintain  that  the  amount  of  losses  in  a  com- 
munity increase  proportionately  with  the  gross  amount  of  in- 
surance written  in  that  community.  Therefore,  since  the  basis 
of  the  premium  rates  is  determined  from  the  average  loss  cost 
of  the  different  classes  of  risk,  the  rates  for  insurance  would 
tend  to  be  lower,  and  the  insuring  public  would  in  the  long 
run  be  the  benefiting  party  of  this  insurance  contract." 

You  will  note  that  the  viewpoint  taken  by  the  writers  of  the 
papers  just  quoted  is  in  several  instances  strikingly  original,  but 
none  the  less  logical  and  convincing. 

I  have  assumed  that  you  all  know  the  phraseology  and  the 
workings  of  the  Co-insurance  clause  so  fully  that  it  is  not  necessary 


378  LECTURES  ON  FIRE  INSURANCE 


The  Opera-    for  us  to  dwell  on  either  of  those  points  at  this  time.      The  term 
tionof  theCo- tt  p^,i]  Co-insurance  "  is  used  where  100''y(,  is  carried,  that  is  where 

insurance         .1      ^   x.   i   •  •  ^-      n     -1  1  1  r    1 

-,  tlie  total  insurance  is  practically  the  same  as  the  value  of  the  prop- 

erty insured.  Percentage  Co-insurance  Clauses,  usualh'  either 
80%  or  90%,  mean  that  the  insurance  carried  is  agreed  to  be  either 
S0%,  or  90%  of  the  sound  value  of  the  insured  property.  The 
operation  of  this  clause  in  the  event  of  loss  is  more  a  matter  of  loss 
adjustment  and  apportionment  than  of  a  discussion  of  the  Clause 
itself. 

\\  here  properties  are  under  good  public  protection  and  in  con- 
sequence there  is  a  less  chance  of  total  losses  resulting,  the  presence 
of  a  Co-insurance  Clause  is  of  the  greatest  importance.  Where 
properties  are  entirely  outside  of  protection,  and  where  losses  are 
nearly  all  total,  it  is  not,  of  course,  as  important  a  matter  since  the 
operation  of  the  clause  in  the  event  of  a  total  loss  alwavs  gives 
the  claimant  the  face  of  the  policv  unless  s;mie  exceeds  the  loss 
sustained. 

With  Sprinklered  Risks  where  the  vast  preponderance  of  the 
losses  are  of  relati\ely  small  amounts  when  contrasted  with  the 
total  insurance  involved,  owing  to  the  safeguarding  effect  of  the 
Sprinkler  system,  a  higher  percentage  of  insurance  with  respect  to 
vakie  is  essential  and  therefore,  a  clause  guaranteeing  90%  or  even 
100%  of  the  sound  value  is  almost  in\ariablv  issued. 
Guaranteed  J"  some  cases,  a  guaranteed  amount  of  insurance  is  specified  by 

Amounts  in    a  clause  attached  to  the  policies  in  place  of  a  percentage  amount. 

lieu  of  Co-m-  Xhere  are  reasons  both  for  and  against  this  practice.      Its  favorable 

surance.  r     ^  •    n  ,  ,      ,1  1      •  •.        1 

leatures  are  especially  apparent  to  the  assured,  since  it  retluces  ma- 
terially the  element  of  doubt  as  to  what  the  actual  value  of  the 
insured  property  will  be  considered.  You  will  note  that  we  sav 
"reduces"  this  element  of  doubt.  It  does  not  entirely  remove  it, 
as  is  often  assumed  to  be  the  case.  If,  at  the  time  of  a  loss,  it  were 
found  that  the  property  was  actually  of  less  value  than  the  guaran- 
teed amount  of  insurance,  a  sum  in  excess  of  this  actual  value 
would  be  no  more  collectible  with  a  guaranteed  amount  of  insur- 
ance than  would  be  secured  imder  the  operation  of  the  Co-insurance 
clause  itself.  Guaranteed  amounts  of  insurance  do  not  make  the 
policy  a  "  valued  "  contract.  The  objection  to  using  this  clause  are 
fluctuations  in  vahie,  and  also  the  fact  that  it  can  only  be  admissible 
where  a  formal  appraisal  by  disinterested  and  competent  experts 
has  been  made  in  order  to  determine  the  sound  value  of  the  prop- 
erty and  from  that  to  fix  the  guaranteed  amount  of  insurance  that 


MISCELLANEOUS  CLAUSES  379 

shall  be  carried.  There  is  always  difficulty  and  expense  attendant 
upon  the  securing  of  dependable  estimates  of  this  sort,  and  as  we 
have  just  stated,  appreciation  and  depreciation  of  property  that  is 
sure  to  result,  especially  if  the  appraisal  is  one  of  many  years  stand- 
in^',  in  leaving  the  assured  either  short  of  needed  insurance  or  to 
have  been  at  the  expense  of  carrying  more  than  he  needed.  It  is 
objectionable  too,  in  that  for  a  possible  benefit  to  the  few  who 
have  losses,  it  adds  to  the  cost  of  insurance  to  the  community  as 
a  whole. 

The  question  is  sometimes  raised  as  to  what  is  the  effect  on  a  Average  and 
policy  where  both  the  Average  Clause  and  the  Co-insurance  Clause  Co-insurance 
are  attached,  some  seeming  to  think  that  one  does  away  with  the ^^S^*"^""* 
other  and  that  complication  is  likely  to  result.      Under  the  condi- 
tions of  the  Average  Clause,  the  policy  becomes  Specific  and  the 
Co-insurance  Clause  is  as  applicable  to  a  vSpecific  policy  as  to  one 
of  a  blanket  or  compound  nature,  the  procedure,  therefore,   is  to 
make  the  policy  specific  according  to  the  provisions  of  the  Average 
Clause  and   then  apply  the  Co-insurance  Clause  to  these  various 
specific  items  separately. 

Many  of  the  most  embarrassing  non-concurrencies  that  develop  Non-Concor- 
in  connection  with  loss  settlements  are  due  to  the  presence  ofrencies. 
either  Average  or  Co-insurance  Clauses,  on  some  of  the  policies 
and  their  absence  on  others.  The  questions  that  arise  under  this 
condition  are  ones  that  can  be  more  intelligently  treated  in  a  dis- 
cussion of  losses  and  adjustments,  but  it  wdll  not  be  amiss  here  to 
state  that  it  seems  very  desirable  that  insurance  companies  should 
get  together  over  this  and  adopt  a  universal  clause  to  be  used  on  all 
policies  stating  the  procedure  to  be  followed  in  the  event  of  non- 
concurrencies,  either  from  the  conditions  such  as  we  have  just  de- 
scribed or  those  that  arise  from  other  variations  in  description  of 
property  or  clause  attachments  to  the  policy.  Our  British  brethren 
have  to  a  large  extent  done  away  with  this  difficulty  that  we  so 
frequently  are  forced  to  confront  by  adopting  what  they  are  pleased 
to  term  the  "Second  condition  of  Average." 


380  LECTURES  ON  FIRE  INSURANCE 


QUESTIONS 
I 

1.  What  is  the  purpose  of  Forms  and  Clauses  in  the  writing 
of  fire  insurance  policies? 

2.  To  be  permanently  satisfactory  what  should  be  the  nature 
of  Forms  and  Clauses? 

3.  To  what  extent  can  Forms  and  Clauses  be  rightfully  used 
on  the  fire  insurance  contract? 

4.  What  is  the  main  object  of  the  standard  fire  insurance 
policy? 

5.  Name  some  of  the  standard  policy  provisions  which  re- 
quire the  addition  of  a  Form. 

6.  What  are  some  of  the  provisions  of  the  standard  policy 
that  do  not  admit  of  alteration  by  the  attachment  of  either  a  Form 
or  a  Clause? 

7.  In  their  relation  to  the  standard  policy  where  can  Clauses 
properly  be  used? 

8.  What  are  Forms? 

9.  What  are  Clauses? 

10.  Into  what  classes  would  you  sub-divide  Forms? 

11.  Into  what  classes  would  you  sub-divide  Clauses? 

12.  W'hat  is  the  dangerous  tendency  of  those  devising  Forms 
and  Clauses? 

13.  From  the  viewpoint  of  what  condition  should  you  always 
regard  a  Form  or  a  Clause? 

14.  How  may  any  Standard  policy  be  made  a  Valued  one? 

15.  What  sort  of  a  contract  is  that  of  fire  insurance? 

16.  Why  is  a  valued  policy  an  undesirable  contract? 

17.  In  filling  in  the  "headings"  of  a  policy  what  special 
care  should  be  exercised? 


QUESTIONS  381 

II 

1.  How  should  a  Form  be  regarded  by  insurer  and  insured? 

2.  What  will  determine  whether  a  policy  is  specific,  or 
blanket,  or  open,  or  floating,  or  excess? 

3.  As  an  instrument  of  description  what  should  a  Form 
accomplish  ? 

4.  Name  some  of  the  common  but  dangerous  phrases  used 
in  descriptive  Forms. 

5.  What  should  the  policy  writer  be  sure  of  when  drafting 
a  Form  ? 

6.  In  Forms  of  property  description  what  are  some  of  the 
more  frequent  errors  ? 

7.  W^hat  may  the  phrases  ''Premises"  and  "Adjoining  and 
communicating"  be  construed  to  mean? 

8.  Is  it  better  in  describing  the  location  of  movable  property 
to  say  "All  while  contained  in,"  or  ''Only  while  contained  in," 
and  why  ? 

9.  Is  new  phraseology  in  Forms  desirable  as  a  general 
proposition? 

Ill 

1.  What  do  we  mean  by  Forms  for  other  than   fire   liability? 

2.  Define  the  following  kinds  of  insurance:  Use  and  Occu- 
pancy;  Rent;  Leasehold  Interest ;   Profit:  Sprinkler  Leakage. 

3.  What  should  be  first  determined  in  placing  insurance 
under  each  of  these  Forms? 

■4.  Why  should  the  per  diem  contribution  under  an  annual 
U.  &  O.  policy  be  1-300  of  the  policy,  even  though  the  plant  on 
which  the  insurance  is  taken  out  could  be  replaced  in  a  portion  of 
that  time? 

5.  Does  the  operation  of  an  U.  &  O.  contract  necessarily 
cease  at  the  date  of  expiration  of  the  policy? 

6.  Why  is  the  phrase  "'Rental  value"  a  dangerous  one  in  a 
Rent  policy  ? 

7.  What  contract  other  than  that  of  insurance  may  have  an 
important  bearing  on  a  Rent  or  Leasehold  Interest  policy? 

8.  What  should  this  outside  contract  condition  suggest  to  the 
policy  writer? 


382  LECTURES  ON  nRE  INSURANCE 


9.  Why  is  a  Rent  insurance  contract  generally  freer  from 
moral  hazard  than  a  Leasehold  Interest  contract? 

10.  What  conditions  should  the  underwriter  always  be  sure 
of  in  writing  Profit  insurance? 

11.  Sprinkler  Leakage  insurance — what  should  be  determined 
before  issuing  a  policy  for  same? 

12.  Draft  Forms  giving  the  essential  features  of  the  five 
kinds  of  insurance  against  other  than  direct  fire  loss  that  we  have 
just  mentioned. 

IV 

1.  What  kinds  of  policies  cover  properties  in  more  than  one 
location  ? 

2.  What  general  form  of  contract  is  used  in  insuring  proper- 
ties that  are  in  various  locations? 

3.  What  is  a  Floating  policy  of  fire  insurance? 

4.  Describe  a  Tourist  policy;  its  purpose,  and  its  usual 
limitations. 

5.  Draft  a  Tourist  policy  form. 

6.  What  is  meant  by  the  term  "Common  Carrier"? 

7.  Common  Carrier  liability  insurance  is  designed  to  protect 
whom  and  to  w^hat  extent? 

8.  What  should  be  known  by  the  Insurance  Company  in 
order  to  safely  draft  a  form  for  insurance  of  this  sort? 

9.  What  is  Excess  insurance,  and  what  is  it  designed  to  cover? 

10.  Draft  an  Excess  form. 


V 

1.  What  in  general  do  Clauses  of  Permission  accomplish? 

2.  What  do  we  mean  by  a  "Waiver"  in  fire  insurance? 

3.  If  a  policy  is  voided  by  the  assured  performing  or  allow- 
ing some  condition  forbidden  by  the  contract,  what  is  the  status 
of  that  contract  after  the  forbidden  condition  ceases? 

4.  What  is  the  status  of  the  contract  if  the  forbidden  condi- 
tion causes  a  fire? 

5.  Name  some  of  the  policy  conditions  that  can  properly  be 
waived  bv  Clauses  of  Permission. 


QUESTIONS  383 

6.  Name  some  of  the  provisions  of  the  policy  that  cannot 
properly  be  waived  by  Clauses  of  Permission. 

7.  Draft  three  Permissive  Clauses  each  waiving  a  different 
policy  condition. 

VI 

1.  What  do  Clauses  of  Exemption  in  fire  insurance  accom- 
plish ? 

2,  Give  an  example  of  a  Clause  of  Exemption  and  describe 
its  object. 

8.  What  is  meant  by  "Consequential  Damage"? 

4.  What  are  the  purposes  of  Clauses  of  Warrant? 

5.  What  is  the  usual  effect  of  a  Warranty  Clause  on  the  rate? 

6.  Give  an  illustration  of  a  Warranty  Clause. 

7.  What  are  some  of  the  Clauses  that  relate  to  Title  or 
Insurable  Interest? 

8.  What  are  some  of  the  special  emergencies  that  may  arise 
in  connection  with  claims  under  fire  insurance  policies  that  call 
for  special  clauses? 

9.  What  is  the  attitude  of  the  standard  policy  on  losses  where 
an  explosion  occurs,  both  when  the  fire  causes  the  explosion  and 
when  the  explosion  causes  the  fire? 


vn 

1.  What  is  the  purpose  of  the  following  Clauses: — 

Three-quarter  Value; 
Three-quarter  Loss ; 
Average ; 
Co-insurance  or  Reduced  Rate. 

2.  Illustrate  each  one  of  these  Clauses. 

3.  In  general  what  are  these  Clauses  used  for? 

4.  Why  is  the  Co-insurance  Clause  an  equitable  and  a  desir- 
able provision,  both  from  the  standpoint  of  the  Insurance  Com- 
pany or  the  Insured,  and  of  the  community  as  a  whole? 


384  LECTURES  ON  FIRE  INSURANCE 


BIBLIOGRAPHY. 

Bament,  W.  N.  :  Forms.  From  the  Company's  standpoint.  An 
address  before  the  Insurance  Society  of  New  York,  Feb.  20, 
1912.     Pam.,  27  p.,  N.  Y.,  1912. 

Cavell,  J.  Scott:  A  few  remarks  on  the  arbitration  clause.  Jour- 
nal Insurance  Institute  Great  Britain  and  Ireland,  7:  177. 

Crawford,  William  S. :  Pointers  for  local  agents.  255  p.,  Chi- 
cago, 1908.      (Western  Underwriter  Co.) 

Daniels.  W.  H.  :  The  apportionment  of  loss  and  contribution  of 
compound  insurance.      77   p.,    Indianapolis,    1902.      (Rough 

Notes). 

Evans,  Hugh  C.  :  Contribution  in  respect  of  fire  losses.  Journal 
Institute  Insurance,  Great  Britain,  12:143. 

Hine,  C.  C.  :  Hine's  Book  of  policy  forms,  -tth  ed.,  revised  by 
Samuel  R.  Weed,  235  p..  New  York,  1909. 

Huebner,  Solomon  S.  ;  Property  insurance.  421  p.,  New  York, 
1911.      D.  Appleton  &  Co. 

Lucas,  Julian.  Jr.  :  Forms.  From  the  broker's  standpoint.  An 
address  delivered  before  the  Insurance  Society  of  New  York. 
Feb.  27,  1912.     Pam.,  22  p.,  N.  Y.,  1912. 

National  Board  Fire  Underwriters:  Clauses  and  forms  adopted 
l)y  the  N.  B.  F.  U.      Pam.,  15  p.,  New  York.   1911. 

Pipkin,  Samuel  J.  :  Average  conditions  of  a  fire  insurance  policy. 
Journal  Insurance  Institute  Great  Britain  and  Ireland.  1:243. 

Richards,  George:  Forms.  In,  A  treatise  on  the  law  of  insur- 
ance.     New  York,  1911.      (Bank's  Publishing  Co.) 

Sloan,  E.  J.  :  The  average  and  eighty  per  cent  clause  of  fire 
insurance  policies.  Proceedings,  Insurance  Institute  of 
Hartford,  1909 :  ()7. 


BIBLIOGRAPHY  385 


Spectator  Co.:   Hints  to   the  assured.      Pam.,  G4   p.,  New   York, 
1904. 

Whitney,    Albert    W. :   The    co-insurance   clause.       Proceedings, 
Fire  Underwriters'  Association  of  the  Northwest,  1904:154. 

Williams,  T.  H.  :   Permits  and  clauses.     Proceedings  Fire  Under- 
writers of  Pacific  1912: 104-138. 


PART  V. 

LOCAL  AGENCY 
Organization  and  Management 


COMMON  LAW  OF  AGENCY 

^Vhel•e  anyone  authorizes  another  to  do  any  act  or  series  of 
acts  for  him,  the  first  party  becomes  the  principal  and  the  latter  the 
agent.  The  authority  may  be  expressly  conferred  in  writino-  by 
power  of  attorney  or  appointment,  or  may  be  implied  by  the  deal- 
ings between  the  parties. 

Anyone  of  full  age  and  sound   mind   may  be  a  principal   or 
agent.     No   person   of  unsound  mind  can   he   either   principal   or 
agent ;   nor  can  the  following  be  competent  as  principals  : — 
(a)      Minors. 

(6)      Alien  enemies  appointed  during  war. 
(c)      Driuikard's  contract  \oidable. 
But  (a)      Infant  may  be  agent. 

Brown  v.  Hartford  Fire  Ins.  Co.  :   117  Mass.,  479. 

"If  a  settlement  is  made  by  a  member  of  a  firm  with  an 
insurance  company,  for  a  loss  occasioned  to  property  of  the 
firm  by  a  peril  insured  against,  the  firm  cannot  maintain  an 
action  on  the  policy  without  first  restoring  or  offering  to  restore 
what  has  been  receiyed  under  the  settlement,  although  the  part- 
ner who  made  the  settlement  was  a  minor,  and  the  settlement 
was  effected  through  the  fraud  of  an  agent  of  the  company." 

Brown,  who  made  the  settlement  for  himself  and  his  partner, 
was  a  minor,  but  it  was  held  that  as  agent  he  bound  the  trrm. 

In  Commonwealth  v.  Holmes:  119  IMass.,  195,  a  minor  son 
as  clerk  made  liejuor  sales  for  his  father,  and  the  latter  was  held 
criminally  liable  for  the  acts  of  his  agent. 

\b)  It  was  uniformly  held,  during  the  existence  of  slayery 
in  the  United  States,  that  a  master  might  constitute  his  slave  his 
agent. 

In  Chastain  v.  Bowman:   1  Hill  (S.  C.)  270,  the  court  said? 
"  There  is  no  condition,  howeyer  degraded,  which  depri\  es  one  of 
the  right  to  act  as  a  priyate  agent ;   the  master  is  liable  eyen  for  the 
act  of  his  dog,  done  in  pursuance  of  his  command." 
(c)       Wife  can  be  agent  of  her  husband,  or 
((/)      HtisbiDid  of  wife. 
Whateyer  a  man  can  do  himself  he  can  do  by  his  agent,  unless  : — 


390  LECTURES  ON  FIRE  INSURANCE 

(a)      Forbidden  by  law,  e.  ^>-.,  libel  for  divorce. 
{d)      Against  public  policy. 

(c)      Principal  acting  in  a   position   of  personal  trust,  e.  g-.^ 
pid^lic  officer,  executor,  administrator,  trustee,  guard- 
ian, director,  etc. 
A  corporation  ?>iiist  act  by  agent.     Stockholders  may  vote,  but 
agents  must  carry  out  the  vote. 

Principal  is  bound  to  third  party  :  — 

(a)     By  acts  in  scope  of  agent's  authority. 
(3)      By  acts  in  scope  of  agent's  apparent  authority, 
(c)     When  contract  made  with  agent,  and  principal  after- 
ward disclosed. 
Agent  is  bound  to  third  party  : — 

(a)      When  authority  is  exceeded. 

(^)      When  agency  is  unknown  to  party  dealing  with  him  at 
time  of  dealings  whether  the  principal  is  subsequently 
disclosed  or  not. 
Principal  is  not  bound  :  — 

(«)      By  unauthorized  acts  of  agent,  unless 

(1)  Ratified  by  him. 

He  cannot  take  the  benefits  and  decline  the 
obligations 

(2)  Within  the  apparent  scope  of   his    authority, 
and 

(«)      Limitation  not  known  to  party  dealing 
with  agent,  and  circumstances  not  such 
as  to  charge  him  with  duty  of  ascer- 
taining scope. 
Agency  cannot  be  proven  by  testimony  of  the  agent  alone. 

The  agent  is  bound  to  utmost  good  faith  to  principal,  and  prin- 
cipal to  agent,  either  to  exact  terms  of  agency,  or  as  implied  from 
relationship,  and  must  make  good  to  the  other  party  for  any  loss 
occasioned  by  breach  of  contract,  expi'ess  or  implied,  or  breach  of 
duty. 


INSURANCE  AGENTS 
Who  Are  Insurance  Agents 

In  general,  at  common  law,  an  insurance  agent  is  an  agent 
employed  by  an  insurer,  usually  an  insurance  company,  to  perform 
some  act  or  acts  in  furtherance  of  the  business  of  his  principal.  In 
a  narrower,  but  more  familiar  sense,  the  term  is  used  to  designate 
those  agents  employed  to  solicit  risks  and  effect  insurance. 

While  it  is  not  necessary  to  prove  an  express  contract  between 
an  insurance  company  and  one  alleged  to  be  its  agent  to  establish 
the  relation  of  principal  and  agent  between  them,  either  that  must 
be  done  or  the  conduct  of  the  parties  must  be  such  that  the  relation 
may  be  inferred  therefrom. 

Whether,  upon  a  given  state  of  facts,  one  is  or  is  not  to  be 
deemed  the  agent  of  the  insurer,  has  generally  been  held  to  be  a 
question  of  law. 

16  Am.  &  Eng.  Ency.  of  Law,  2d  ed.,  p.  907. 

A  person  who  agrees  to  solicit  business  for  a  certain  company 
to  the  exclusion  of  other  companies  is  an  insurance  agent  and  not  a 
broker. 

Lake  Charles  v.  Equitable  L.  Ass.  Soc.  114  La.  836. 

Holding  one  out  by  the  insurer  as  agent  or  ratifying  his  acts 
as  agent  is  sufficient  to  establish  agency. 

However,  in  Massachusetts  the  term  "agent,"  as  applied  to 
insurance  agents,  is  defined  by  statute^  and  agents  for  insurance 
companies  must  be  licensed  before  they  can  transact  lousiness  law- 
fully. But  they  may  bind  principal  on  insurance  imlawfully 
negotiated. 

A  General  Agent  may  in  the  due  prosecution  of  the  com- 
pany's business,  delegate  to  another  authority  to  do  any  act  within 
the  scope  of  his  authority ;  and  the  acts  of  a  sub-agent  done  in  pur- 
suance of  such  delegated  authority  will  have  the  same  effect  as  if 
done  by  the  general  agent  himself. 

In  such  case  the  sub-agent  becomes  the  agent  and  direct  repre- 
sentative of  the  principal. 

And  the  fact  that  he  is  compensated  by  a  commission  on  the 
business  he  brings  in  does  not  affect  his  legal  status  or  make  him 
an  insurance  broker. 

16  Am.  &  Eng.  Ency.  of  Law,  2d  ed.  909. 


INSURER'S  AGENT  NOT  AGENT  OF  INSURED 


In  Respect 
to  Principal. 


Additional 
Insurance 
by  another 
Agent. 


The  agent  of  an  insurance  company  is  not  the  agent  of  the  in- 
sured in  any  matter  connected  with  the  issuing  of  the  policy. 

If  he  {a)  prepares  the  appHcation  ;  (d)  or  makes  any  repre- 
sentations to  the  insured  as  to  the  character  or  effect  of  the  state- 
ments in  the  appHcation  he  is  still  agent  of  the  company,  and  the 
co77ipa)iy  cannot  limit  the  agency  by  instructing  the  agent  that  he  is 
agent  only  for  the  purpose  of  receiying  and  transmitting  the  appli- 
cation and  the  premium. 

The  Massachusetts  statutes  simply  re-at!irm  these  rules.  Ho\y- 
eyer,  \yhere  the  agent  \\\\o  procures  the  insurance  does  so  in  sey- 
eral  companies  besides  the  one  or  more  for  which  he  is  agent^  his 
standing  is  as  a  broker  in  obtaining  insurance  in  those  companies 
and  as  agent  of  tJie  assured. 

Westtield  Cigar  Co.  v.  Ins.  Co.  of  No.  America  :  169  Mass. 
382. 

Powers,  Rights,  Duties  and  Liabilities  of  Agent 

1.      Powers  and  Rights 

(a)      In  general  (and  in  the  absence  of  statute)  are  in  the 
main  goyerned  by  the  same  rules  of  law  as  those  apply- 
ing to  all  classes  of  agents. 
{b)      Where    there    is   an   express    contract    its    terms    \yill 
goyern. 
Right  to   Compensation. 

(a)  Is  usually  according  to  the  terms  of  an  express  contract. 

[b)  But  eyidence  of  a  well  established  custom  among  insur- 
ance companies  is  admissible  to  explain  the  contract  if 
it  is  technical  or  ambiguous. 

If  one  agent  procin'es  an  application  for  insiu'ance  and  subse- 
quently another  agent  of  the  company  induces  the  applicant  to  in- 
crease the  amount  applied  for,  the  first  agent  is  entitled  only  to  his 
commissions  on  the  original  amoimt. 

So  where  the  first  application  is  refused  and  a  new  application 
for  an  increased   amount   is  secured    by  another   agent. 

Compensation  of  Sub-agents  is  usually  fixed  bN-  the  general 
agent  who  appoints  them  but  the  Company  is  liable  for  payment 
and   not  the  general  agent,  if  he  acts  within  his  authority. 


INSURER'S  AGENT  NOT  AGENT  OF  INSURED  393 

Forfeiture  of  Compensation  for  Misconduct  or  Breach  of  Trust . 
(a)  The  implied  condition  in  contracts  of  employment  is 
that  the  agent  will  honestly  and  faithfully  look  out  for 
the  interests  of  his  principal. 
(3)  If  he  misconducts  himself  or  proves  unfaithful  to  his 
employer's  interest  to  a  gross  and  ag-gravated  extent 
he  may  forfeit  all  right  to  compensation. 

Ordinary    or    slight    misconduct  is   not   enough    for 
such  forfeiture. 
Duties  and  Liabilities, 
(a)      In  gc7teral. 

The  agent  is  bound  to  ser\e  the  company  in  good  faith    Duties  and 
to  the  best  of  his  ability,  and  if  he  is  careless  or  negli-   Liabilities  of 
gent,  or  acts  in  bad  faith  to  the  company,  he  is  liable      ^*"  ' 
to    it    for    any    damages    sustained     by    the    company 
through  such  negligence  or  bad  faith. 

(1)      Ordinary  rules  of  law  as  to  damages  apply, 
/.   e.,    liability    for    all    damage    actually  and 
properly  arising  from  the  act  complained  of. 
(3 )      Liability  for  Writing  Insurance  Contrary  to  Instructions. 
(1)      He  is  liable  for  loss  so  occasioned  unless  the 
company    expressly    or    impliedly   ratifies   his 
act.      Failure   to   repudiate,    if    long    enough, 
may  work  a  ratification, 
(c)      Liability  for  Neglect  to  Cancel  Policies. 

(1)  If  the  agent's  authority  includes  cancellation 
of  policies,  and  he  does  not,  when  so  ordered 
by  the  company,  cancel  zvit/iin  a  reasonable 
time^  he  will  be  liable  for  any  loss  to  the  com- 
pany resulting  from  his  negligence. 

What  is  a  reasonable  time  is  a  question  for 
the  court  if  the  facts  are  clear, 
(la)      The  fact  that  his  own  judgment  does  not  agree 

with  the  company's  is  no  excuse  for  delay 
{lb)  Xor  that  he  ga\  e  notice  of  cancellation  to  the 
broker.  The  Broker  in  this  case  is  the 
agent's  agent,  not  the  agent  of  the  assured. 
(Ic)  It  is  not  competent  to  relie^■e  the  agent  of 
liability  to  pro\e  a  custom  to  procure  can- 
cellation of  policies  by  the  agency  of  the 
broker  who  negotiated  the  insurance. 


394  LECTURES  ON  FIRE  INSURANCE 


How  Direction  to  Cancel  must  be  given 
Cancellation.  It  is  not  necessary  that   notice  to  cancel  shall  be  a  command. 

Notice  that  company  desires  to  cancel  is  enough. 

It  is  not  contributory  negligence  on  the  part  of  the  company 
that  it  d(jes  not  itself  proceed  to  cancel  a  policy  when  the  agent 
fails  to  do  so  under  his  instructions. 

The  Company  may  waive  Cancellation,  either 
(a)      expressly,  or, 

{6)      by  conduct  such  as  to  mislead  the  agent. 
In  either  case,  the  company  cannot  hold  the  agent  for  loss. 
The    measure  of    damages   follows    the  usual    rule,   /.  c,   the 
actual  loss  only  is  recoverable. 

Unauthorized  or  wrongful  cancellation  is  go\erned  bv  the  same 
rules,  as  well  as  any  other  act  in  ^•iolation  of  duty  to  the  company. 

In  Respect  to  Assured  —  Power  to  Bind  Company 

(a)      In  general,  as   in  other  cases  of  agency,  an  insurance 
company  is    bound  by  the  acts  and  representations  of 
its    agents   done  and  made  within   the  scope  of  their 
employment   and    authority :     and    in    Massachusetts 
the    legislature  has    further  said  that  a  foreign    com 
pany  is    bound    by  the  acts    of  the  agent   within    the 
apparent  scope  of  his  authority . 
Acts  of  1907,  c.  576  ^  92. 
A  Kansas  case  has  held  that  an  insurance  company  is  liable  to 
third  persons  in  a  civil  suit  for  the  frauds,   deceits,  concealments, 
misrepresentations,  and  omissions  of  duty  of  a  general  agent  in  the 
course  of  his  employment,  although  the  company  did  not  authorize 
or  justify  such  misconduct. 

New  York  Life  Ins.  Co.  v.  McGowan  :    18  Kan.  300. 
It  is  also  bound  by 

(a.3)      their  knowledge  of  facts,  and 

(^4)      receipt  of  notices  affecting  the  business  which  they 
are  authorized  to  conduct. 

(See  Massachusetts  statute  as  to  apparent  scope  of  authority  of 
agents  of  foreign  companies.) 

See  vStuart  v.  Reliance  Ins.  Co.  ;    179  Mass.  434. 
Knowledge  of  or  notice  to  officers  or  agents:  — 

A  mutual  fire  insurance  compan\-  cannot  be  held  to  have 
waived    compliance   with  a   by-law    reiiuiring  a   consent   for  subse- 


INSURER'S  AGENT  NOT  AGENT  OF  INSURED  395 

quent  insurance  to  be  endorsed  on  the  policy  by  the  secretary, 
liecause  the  same  person  acted  as  agent  for  both  companies  in 
issuin«^  the  two  policies,  or  because  the  first  company,  long  after  the 
obtaining  of  the  second  policy,  notified  the  insured  of  an  assessment 
due  from  him,  and  accompanied  such  notice  with  a  schedule  of 
losses  claimed  of  the  company,  in  which  his  claim  was  included, 
and  marked  ''  unadjusted." 

Forbes  v.  Agawam  Mut.  F.  Ins.  Co.  ;  9  Cush.  470. 

A  policy  of  insurance  provided  that  the  use  of  the  place  during 
the  continuance  of  the  insurance  for  any  trade  or  business  denomi- 
nated hazardous  or  extra  hazardous,  or  specified  in  the  memorandum 
of  special  risks,  without  permission  of  the  company,  should  a\  oid 
the  policy ;  also,  that  the  conditions  annexed  should  be  used  or 
resorted  to  to  explain  the  rights  and  obligations  of  the  parties  in  cases 
not  otherwise  specially  provided  for.  One  of  the  conditions  was 
that,  if  after  insurance  the  risk  should  be  increased  by  any  means 
in  the  control  of  the  insured,  or  the  premises  lie  so  occupied  as  to 
render  the  risk  more  hazardous,  the  policy  should  be  void. 

Held,  that  parol  evidence  was  inadmissible  to  show  that  the 
use  of  the  building  for  a  purpose  specified  in  the  memorandum  of 
special  risks,  and  not  mentioned  in  the  policy,  or  indorsed  thereon, 
\yas  in  fact  known  to  the  agent  of  the  company,  who  visited  and 
examined  the  premises,  agreed  with  insured  on  wdiat  facts  were 
material  to  be  stated,  filled  up  the  application,  and  issued  the  policy. 
Lee  V.  Howard  Fire  Ins.  Co.  ;  3  Gray  683. 

\Vhere  a  policy  contains  a  provision  that  the  agent  through 
whom  the  insurance  is  effected  shall  be  the  agent  of  the  applicant 
and  not  of  the  company,  evidence  of  knowledge  on  the  part  of  the 
agent  that  insured's  title  was  not  as  described  in  the  application  is 
inadmissible  to  show  a  waiver  of  condition  that  a  misdescription  of 
the  title  or  interest  should  avoid  the  policy.  Cancellation. 

Abbott  V.  Shawmut  Mut.  F.  Ins.  Co.  ;  8  Allen  569 

But  if  by  the  terms  of  a  contract  of  insurance  it  is  expressly 
provided  that  the  application  on  which  the  policy  is  issued  shall  be 
held  to  be  a  warranty  on  the  part  of  the  assured,  knowledge  by  the 
agent  ox  officers  of  the  company  that  certain  answers  in  the  appli- 
cation were  not  correct  is  no  evidence  of  a  waiver  by  the  company. 
Tebbetts  v.  Hamilton  Mutual  Ins.  Co. ;  3  Allen  569. 

Where  a  policy  of  insurance  on  a  dwelling  house  contains  the 
provision  that  it  becomes  void  when  the  occupant  personally  vacates 
the  premises,  unless  immediate  notice  be  given  to  the  insurers  and 


396  LECTURES  ON  FIRE  INSURANCE 

additional  premium  paid,  a  notice  to  an  agent,  who  was  authorized 
only  to  receive  and  forward  applications  for  insurance,  to  collect 
premiums,  and  to  bind  the  company  on  special  hazards  for  ten  days 
only,  is  not  sufficient^  although  the  assui'ed  did  not  know  of  the 
limited  extent  of  the  agent's  authority. 

Harrison  v.  City  Fire  Ins.  Co.  :  9  Allen   lJ31. 
Forfeiture  of  a  policy  of  insurance  for  operation  of  a  factory  at 
night  time,  in  violation  of  its  provisions,  cannot  be  a\oided  bv  proof 
of  knoivledge  on  the  part  of  the  agent  that  similar  establishments 
were   run    at  night,  and  that    plaintiff    could    not    successfidly  and 
profitably  carry  on  his  business  without  working  at  night. 
Reardon  v.  Faneuil  Hall  Ins.  Co.  ;   13o  Mass.  121. 
This  would  doubtless  be  true  if  the  knowledge  referred  to  the 
operation  of  the  factory  insured. 

Neither  the  previous  habits  of  a  person  insured  to  cease  oper- 
ating his  manufacturing  establishment  during  the  dull  season,  nor 
the  general  custom  of  manufacturers  in  the  same  business  so  to  do, 
nor  the  knowledge  by  the  ins/i ranee  agent  of  such  custom,  will 
render  nugatory  an  express  provision  in  a  policy  of  fire  insurance 
that  it  shall  be  void  if  the  establishment  ceases  operation  for  thirty 
days. 

Stone  V.  Howard  Ins,  Co.  ;  153  Mass.  475. 
In  the  interesting  case  of  Newburyport  v.  Fidelity  Mut.  Life 
Ins.  Co.  ;  197  Mass.  596,  a  city  treasurer  paid  annual  premiums  on 
his  life  insurance  with  city  checks.  It  was  held  that  the  company 
had  notice  by  the  receipt  of  such  checks  by  its  cashier  that  in  the 
absence  of  express  authority  the  checks  were  invalid. 

Newburyport  v.  Fidelity  Ins.  Co.  ;  197  Mass.  596. 

AUTHORITY  TO  RECEIVE  NOTICE  OF  LOSS. 

Notice  of  The  fact  that  local  agents  of  an  insurance  company  are   not 

Loss.  authorized  by  their  commission  to  receive  proofs  of  loss  will  not 

pre\ent  a  delivery  to  them  of  proofs  of  loss  being  a  delivery  to  the 
company,  where  the  policy  issued  does  not  notify  the  policy  holder 
that  they  are  agents  of  limited  powers,  and  it  appears  that  they  had 
apparent  authority  by  custom  to  recei\e  proofs  of  loss. 

Harnden  v.  Milwaukee  Mechanics'  Ins.  Co  ;  164  Mass.  382. 
This  does  not  establish  the  ride  that  delivery  to  atty  agent  is 
sufHcient  wherexer  he  may  be  located. 

Apparent  anihoritv  on  the  part  of  a  local  agent  of  an   insur- 


AUTHORITY  TO  RECEIVE  NOTICE  OF  LOSS  397 


ance  company  to  receive  proofs  of  loss  may  be  implied  fro))i  utii- 
versal  custom  among  insurance  companies  for  local  agents  to  pre- 
pare proofs  of  loss  and  send  them  to  the  companies,  when  it  is  not 
done  by  the  adjusters. 

Harnden  v.  Milwaukee  Mechanics'  Ins.  Co ;  164  Mass.  382. 
((5)  Nature  and  Extent  of  Authority. 
General  Agents  are  the  Company  practically,  unless  under 
known  limitations.  A  general  agent  of  an  insurance  company  may 
bind  his  principal  by  any  act  or  agreement  within  the  ordinary  scope 
of  the  kind  of  insurance  business  carried  on  by  the  company  which 
is  not  known  by  the  assured  to  be  beyond  the  authority  granted  to 
the  agent,  such  as  ; — 

(^1)  One  dealing  with  a  general  agent  of  an  insurance 
company  is  under  no  obligation  to  investigate  his 
authority  to  issue  a  policy  on  a  risk  which  is  extra 
hazardous  and  located  in  a  place  other  than  the  town 
in  which  the  agent's  office  is  located. 
German  F.  Ins.  Co.  v.  Columbia  Encaustic  Tile  Co.  ; 

15  Ind.  App.  623. 
(/^2)      Waive  conditions. 

(3o)  Correct  a  description  of  propertv  insured. 
The  \\n\'i<Xx\z\.Q(\  general  agettt  in  this  Commonwealth  of  a  fire 
insurance  company  organized  under  the  laws  of  another  State  has 
authority  not  only  to  accept  risks  and  receive  proofs  of  loss  but  also 
to  adjust  and  settle  losses,  and  the  company  is  bound  by  his  acts 
although  contrary  to  special  instructions  which  are  unkno'wn  to 
the  insured. 

Green  t;.  Star  Fire  Ins.  Co.  ;  190  Mass.  586. 
General  agents  of  foreign  insurance  companies  have  power  to 
waive  preliminary  proof  of  loss. 

Little  V.  Phoenix  Ins.  Co. ;  123  Mass.  380. 

'' He  was  their  agent for  the  purpose  of  doing 

their  general  business  in  this  State.  He  was  emploved  not  merely 
to  receive  and  transmit  applications  for  them  to  accept  or  reject, 
but  apparently  to  take  risks,  to  settle  the  rates  of  premiums,  and  to 
issue  policies  at  his  discretion,  on  their  account.  For  this  purpose 
blank  policies,  signed  by  the  proper  officers  of  the  company,  were 
intrusted  to  him  to  countersign  and  issue.  .  .  So  far  as  the 
Massachusetts  business  of  the  companv  was  concerned,  he,  while 
his  agencv  lasted,  stood  in  the  place  of  a  representative  or  officer  of 
the  company,  and  the  onlv  one  to  whom  they  (phiintiffs)  had 
access,  or  with  whom  they  had  any  communication. 


398  LECTURES  ON   HRE  INSURANCE 


"It  is  true  that,  in  his  character  of  representative  and  agent  of 
the  company,  it  would  not  be  in  his  power  to  dispense  with  or 
modify  the  essential  character  or  substance  of  the  contract.  It  is 
well  settled,  however,  even  in  the  case  of  a  mutual  insurance  com- 
pany, in  which  greater  strictness  is  required,  that  the  officers  of  the 
company  may  in  any  particular  case  waive  or  modifv  the  stipula- 
tions of  the  policy  as  to  the  preliminary  proofs  of  loss,  or  the  form 
and  mode  in  which  the  liability  of  the  company  shall  be  ascertained 

and  made  known It  appears  to  us,  on   taking  into 

consideration  his  relation  to  the  companv,  the  mode  in  which  their 
business  was  done  in  this  state,  and  the  extent  of  his  apparent 
powers  as  their  sole  agent  and  representative,  that  the  modifications 
in  the  directions  of  the  policy  as  to  notice  and  proof  of  loss,  to 
which  he  assented,  was  binding  upon  the  defendants." 

Eastern  R.  R.  Co.  v.  Relief  Ins.  Co. ;  105  Mass.  570. 

The  General  Agent's  Clerks  bind  the  company  by  acts  in  the 
oidinarv  course  of  their  emplovment  acting  under  his  direction; 
and  this  with  his  delegated  authority,  as  sub-agents. 

Special  Agents 

When  it  is  known  that  an  agent  of  an  insurance  company  is 
exercising  mere  special  powers,  the  person  dealing  with  him  is 
bound  at  his  peril  to  ascertain  the  scope  of  the  agent's  authority, 
and  the  company  will  not  be  bound  by  the  acts,  representations, 
or  knowledge  of  facts  of  such  agent  beyond  the  scope  of  his 
employment. 

(Note  again,  ^lassachusetts  statute  binding  foreign  companies 
by  acts  of  their  agents  within  apparent  scope  of  their  authority.) 

If  the  authority  is  express  and  in  writing,  the  company  cannot 
be  bound  by  the  act  of  the  agent  not  within  such  authority,  unless 
it  has  so  acted  or  permitted  the  agent  so  to  act  as  to  justify  the  pub- 
lic or  the  plaintiff  in  believing  that  the  agent  has  other  or  greater 
powers  than  those  given  by  the  written  authority. 

Reynolds  v.  Continental  Insurance  Co.  ;    30  Mich.  lol. 
Farmers'  Mut.  Ins.  Co.  v.  Taylor:   73  Pa.  St.  342. 

The  form  of  "Certificate  of  authority"  given  to  local  Massa- 
chusetts agents  is  here  quoted  as  follows  : — 

Certificate  of  Authority 

"  Be  it  known  that  A.  B.  of  X.,  in  the  County  of  N.,  State  of 
Massachusetts,  is  appointed,  and  by  these  presents  duly  constituted 


AUTHORITY  TO  RECEIVE  NOTICE  OF  LOSS  399 

ai^ent  of  the  Royal  Exchange  Assurance,  with  full  ]:)o\ver  to  receive 
proposals  for  insurance  against  loss  or  damage  by  fire  in  N.  and 
vicinity,  to  receive  moneys  in  payment  of  premiums  to  countersign, 
issue  and  consent  to  the  transfer  of  policies  of  insurance  subject  to 
the  rules  and  regulations  of  the  corporation  and  to  such  instructions 
as  mav  from  time  to  time  be  given  by  the  undersigned." 

If  this  certificate  of  authority  is  framed  and  hung  up  in  plain 
view  of  the  public  in  the  office  of  the  agent,  it  would  seem  that 
anyone  dealing  with  him  would  be  bound  bv  knowledge  of  the 
limitations  in  his  authority  set  out  in  the  certificate. 

Powers  of  Agents  and  Officers  in  Respect  of  Contracts 
in  General 

One  member  of  a  partnership  who  are  the  agents  of  an  insur- 
ance company  has  all  the  powers  of  the  firm  in  issuing  a  policy. 

Kennebec  Co.  v.  Augusta  Ins.  &  Banking  Co.  ;  6  Gray  204. 
Agents  have  power  to  make  oral  contracts  of  insurance. 
Sanborn  v.  Fireman's  Ins.  Co.  ;  16  Gray  448. 
Putnam  i-.  Home  Ins.  Co.  ;  123  Mass.  324. 
Baker  v.  Westchester  F.  Ins.  Co.  ;  162  Mass.  358. 
Sanford  v.  Orient  Ins.  Co.  ;  174  Mass.  41G. 
But  not  to  bind  companv  by  oral  agreement  to  grant  permit 
for  ^•acancies  and  repairs,  when   such  permits  were  to  be  written, 
attached  to  policies  and  copies  sent  to  company. 

Hill  z'.  Commercial  Union  Assur.  Co.  ;  164  Mass.  406. 
Agent  authorized  to  add  to  policy  in  writing  before  deli\ered 
or  accepted  or  premium  paid  a  memorandum  that  building  insured 
is  in  process  of  construction,  and  this  memorandum  will  be  binding 
on  the  company,  even  if  agent,  though  instructed  by  company  to 
make  monthly  returns  of  the  written  parts  of  all  policies,  does  not 
do  so  until  after  the  fire. 

Gloucester  Mfg.  Co.  v.  Howard  Fire  Ins.  Co.  ;  5  Gray  497. 
Express  wai\  er  in  general. 

Where  a  policy  provides  that  its  conditions  shall  only  be  waived 
by  the  written  or  printed  consent  of  the  company,  a  local  agent 
having  authority  only  to  receive  premiums  and  issue  policies  caunof 
bind  the  company  by  an  oral  waiver  of  such  conditions  ;  as  where 
the  local  agent  was  at  the  same  time  chairman  of  the  board  of  select- 
men of  a  town,  and  as  such  issued  to  the  insured  a  license  for  the 
sale  of   intoxicating  liquors,  assuring  him  that  it  would  not  affect 


400  LECTURES  ON  FIRE  INSURANCE 

the  policy  during  its  life,  but  that  he  could  not  let  him  have  another 
at  the  same  rates. 

Kyte  V.  Commercial  Union  Assur.  Co.  ;  144  Mass.  4S. 
An  agent  of  an  insurance  company  to  receive  premiums  and 
applications  for  insurance  and  transmit  policies  has  no  authority  to 
waive  notice  of  an  assignment  of  a  policv. 

Tate  V.  Citizens'  Mut.  Fire  Ins.  Co.  ;  13  Gray  79. 
.Subordinate    agent    cannot    bind    company    bv    his    assent    to 
removal  of  household  furniture,  when  the  assent  is  not  in  writing 
or  in  print  on  the  policv  (as  required  bv  policy). 

Pringle  v.  Spring  Garden  Ins.  Co.  ;  205  Mass.  88. 
A  local  agent  of  an  insurance  company,  with  authority  to 
receive  premiums  and  issue  policies,  has  no  authority,  as  such,  to 
waive  the  condition  of  a  policy  requiring  the  written  or  printed 
assent  of  the  company  to  any  change  in  the  situation  or  circum- 
stances affecting  the  risk. 

Kyte  V.  Commercial  Union  Assu.  Co.  ;  144  Mass.  43. 
As  to  waiver  of  conditions  also  see  Porter  v.   U.   S.  Life  Ins. 
Co.  ;  160  Mass.  183. 

Evidence  that  an  agent  of  an  insurance  company  "  received 
applications  for  insurance,  took  risks,  settled  rates  of  premiums  and 
issued  policies,"  will  not,  in  the  absence  of  evidence  that  he  was 
the  general  agent  of  the  company,  warrant  a  finding  that  he  had 
authority  to  waive  the  preliminary  proof  of  loss  required  by  a  policy 
issued  by  the  company. 

Lohnes  v.  Ins.  Co.  of  No.  America  ;  121  ^lass.  439. 
The  knowledge  of  fire  by  an  agent  of  the  company  does  not 
relieve  assured  from  duty  of  giving  notice  and  making  proof  of  loss. 
Smith  V.  Haverhill  Mut.  F.  I.  Co.  ;  1  Allen  297. 

Adjusters 

An  agent  whose  business  is  to  adjust  losses  may  bind  the  com- 
pany by  his  wai\  er  of  the  proof  of   loss,  or  by  his  compromise  of 
the  loss,  but  has  no  power  to  waive  the  forfeiture  of  a  policy. 
16  Am.  &  Eng.  Ency.  of  Law,  2d  ed.  p.  916. 

Ostensible  Authority 

"  Ostensible  authority  is  such  as  a  principal  intentionally  or  by 
want  of  ordinary  care  causes  or  allows  a  third  person  to  believe  the 
agent  to  possess." 

O'Brien  v.  New  Zealand  Ins.  Co.  :  108  Cal.  227. 


AUTHORITY  TO  RECEIVE  NOTICE  OF  LOSS  401 

When  the  party  dealing  with  the  agent  is  ignorant  of  his 
powers,  or  of  any  limitation  upon  them,  the  liability  of  the  com- 
pany is  co-extensive  with  the  ostensible  or  apparent  authority  of 
the  agent. 

If  the  company  hold  the  agent  out  with  apparent  authority  to 
do  any  act,  it  will  be  bountl  by  such  act  when  done  by  him,  eyen 
if  he  actually  had  no  authority  to  do  it. 

The  real  question  is  wdiat  powers  a  third  person  dealing  with 
the  agent  had  a  right  to  belieye,  and  did  belie\e,  the  agent  to 
possess,  judging  from  the  acts  of  the  agent  and  the  principal. 

So  private  instructions  to  the  agent  would  not  relieve  the 
principal  of  liability  to  third  persons,  although  they  would  make 
the  agent  liable  to  the  principal  for  any  loss  or  damage  sustained 
liy  their  violation. 

Acts  done  after  termination  of  agency  ^  when  thirtl  par- 
ties have  not  had  proper  notice  of  such  termination,  would  fall 
under  the  same  rule. 

Ratification 

Of  course  any  unauthorized  act  of  an  agent  may  be  ratified  by 
the  company  and  thereafter  bind  it  —  provided  it  is  otherwise  legal. 

And,  once  ratified,  the  company  cannot  afterward  object  to 
the  want  of  authority  to  do  the  original  act. 

Effect  of  limitation  in  Policy 

"  A  provision  in  a  policy  of  insurance  that  the  agent  shall 
have  no  power  to  waive,  modify,  or  strike  from  the  policy  any  of 
the  printed  conditions,  is  no  restriction  upon  the  power  of  the  agent 
to  make  a  contract  of  insurance,  but  limits  the  power  of  the  agent 
after  the  contract  has  been  consummated  and  the  policy  issued." 
16  Am.  &  Eng.  Ency.  of  Law,  2d  ed.  917. 

So  far  as  this  principle  is  concerned,  it  would  seem  to  have 
little  application  to  Mass.  under  the  provisions  of  the  statutes  re- 
lating to  the  standard  form  of  policy. 

2.   Personal  Liability 

(a)      Liability  for  sums  received  as  premiums. 

(rt-l)  Where  agent  fails  to  deliver  policy,  as- 
sured, of  course,  can  recover  from  the  agent 
the  amount  so  paid. 

(a2)  Where  person  induced  by  fraudulent  represen- 
tations to  insure. 


402  LECTURES  ON  FIRE  INSURANCE 

He  can  rescind  the  contract  and  recover  money  paid  from 
agent. 

Hedden  v.  Griffin ;  136  Mass.  229. 
(Also  see  criminal  liability  of  agent  under  Mass.  statutes.) 

(«3)  Where  company  has  no  authority  to  do 
business. 
If  an  agent  of  an  insurance  C(jmpany  issues  a  policy  and  re- 
ceives the  premium  after  the  company's  authority  to  do  business  in 
the  state  has  been  revoked,  the  person  thus  paying  the  premiums 
may  recover  it  from  the  agent ;  and  this  although  at  the  time  of 
taking  the  premium  the  agent  was  not  aware  of  the  revocation,  and 
the  statutory  requirements  as  to  publication  of  notice  of  revocation 
had  not  been  complied  with." 

16  Am.  &  Eng.  Ency.  of  Law,  2d  ed.  918. 

Negfligence  or  Fraud  of  Agfent. 

A  misrepresentation,   made  through  mistake,  by  a  person  in- 
sured, as  to  the  amount  of  incumbrance  on  the  property,  will  avoid 
the    insurance,   though  the    application    containing  the   statements 
was  drawn  up  by  an  agent  and  director  of  the  insurance  company. 
Lowell  V.  Middlesex  Mut.  Fire  Ins.  Co.  ;  8  Cush.  127. 
Murphy  v.  People's  Equit.  Mut.  Firs  Ins.  Co.  ;  7  Allen  239. 

A  misrepresentation  has  been  defined  as  "  The  statement  of 
something  as  a  fact  which  is  untrue  in  fact,  and  which  the  assured 
states,  knowing  it  to  be  not  true,  with  an  intent  to  deceive  the 
underwriter ;  or  what  he  states  positively  as  true  without  knowing 
it  to  be  true,  and  which  has  a  tendency  to  mislead  :  such  fact  in 
either  case  being  material  to  the  risk." 

Shaw,  C.  J.  in  Daniels  v.  Hudson  River  Fire  Ins.  Co.  ;  12 
Cush.  416  at  p.  425. 

"As  to  mere  representations  this  section  (1907  c.  576  $  21)  is 
only  declarative  of  the  common  law. 

White  V.  Provident  Savings  Life  Assu.  Society:  163  Mass. 
lOH  at  p.  115. 

A    company  would    be  bound    by   representations   of  a   local 
agent  as  to  the  amount  of  capital  stock  paid  in  and  invested. 
Fogg  V.  Griffin;   2  Allen  1. 

An  application,  made  to  a  mutual  insurance  company  in  a 
printed  form  issued  by  them  1>\'  one  of  their  agents  without  knowl- 
edge of  the  person  to  be  insured,  for  insurance  on  a  l)uilding  stated 
that  *■'  the  property  to  be  insured  "  belonged  to  him  \\  hen  in  fact 
he  owned  the  Iniildiiig  on]\ ,  and  was  a   mere   tenant   at   will   of  the 


AUTHORITY  TO  RECEIVE  NOTICE  OF  LOSS  403 

land  on  wliich  it  stood.  A  policy  was  issued  thereon,  expressly 
made  subject  to  the  lien  of  the  company  on  the  interest  of  the 
assured  in  any  personal  property  or  buildings  insured,  and  the  land 
under  such  buildings,  upon  which  lien  the  company  expressed  their 
intention  to  rely,  and  to  the  by-laws,  the  conditions  of  which  were 
declared  to  be  a  part  of  the  policy,  and  provided  that  the  applica- 
tion should  be  a  part  of  the  policy  and  warranty  on  the  part  of  the 
assured;  that  any  policy  should  be  yoid  "unless  the  true  title  and 
interest  of  the  insured  be  expressed  in  the  proposal  or  application  ;  " 
that  property  held  by  lease,  or  standing  on  land  so  held,  shall  not 
be  insured,  unless  specially  described  as  such  in  the  application; 
that,  "in  case  the  application  is  made  through  an  agent,  the  appli- 
cant shall  be  held  liable  for  the  representation;"  and  that,  "no 
insurance  agent  or  broker  forwarding  applications  to  this  ofHce  is 
authorized  to  bind  the  company  in  any  case  whatever," 

Held,   that   the  assured,  by  accepting  the  policy,  adopted  the 
representations  of  the  agent, 

Kibbe  v.  Hamilton  Mut,  Ins,  Co.  ;  11  (irav  1(33, 
Held,  further  that  parol  evidence  of  the  agent's  knowledge  of 
the  actual  facts  as  to  the  insured's  interest  was  inadmissible. 
Kibbe  v.  Hamilton  Mut.  Ins,  Co.  ;  11  Gray  163, 
Where  a  policy  of  life  insurance  pro\ides  that  the  application 
shall   be  part  of  the  contract,   and  any  untrue  answers  render  the 
policy  void,  material  misrepresentations  in  the  application  will  avoid 
the  policy,  though  inserted  therein  by  the  soliciting  agent,  without 
knowledge  of  insured,  who  orally  stated  the  truth  to  the  agent. 
McCoy  V.  Tvletropolitan  Life  Ins.  Co,  ;    138  Mass,  82. 

Sts.  1861  c.  170  and  1864  c.  114  do  not  apply. 
{b)      Liability  for  Neglect  to  Effect  Insurance. 
Where  an  insurance  agent  contracts  with  a  person  to  effect  for 
him  a  policy  of  insurance  and  receives  from  him  a  premium  there- 
on, he  will  doubtless  be  liable  for  any  damages  resulting  from  his 
neglect  to  do  so. 

{c)      Liability  for  Loss   Resulting  from   Cnauihorized  Acts 

or  Representations. 
Is  of  course  perfectly  clear. 
But  Stat,  of  Frauds  applies  to  misrepresentations. 

{(i)  And  an  agent  who  issues  a  policy  in  a  foreign  com- 
pany not  authorized  to  do  business  in  the  State  is  per- 
sonally liable  to  the  policy  holder  for  any  loss  occurring 
under  the  policy,  both  at  common  \a.\\  and  under  the 
Mass.  statutes. 


404  LECTURES  ON  nRE  INSURANCE 


Termination  of  Agency. 

(   a)      How 

(al)      As  a  general  rule  may  be  by  election  of  either 

party 
(a2)      Or  by  operation  of  law  if  either  party  is  inca- 
pacitated 
such  as  agoif  s  licei/se 
or 
company' s  authority 
to  do  hiisiness 
rexoked 

(a3)      By  agreement  of  parties 
(<5)      Effect  of  Termination. 

((51 )  Agent's  power  to  bind  principal  ceases,  tinless 
termination  unknown  through  neglect  or  fault 
of  company  to  prior  customer  still  dealing 
with  agent. 
((32)  Agent's  right  to  commissions  on  renewal 
policies  ceases 

unless  his  express  contract  provides  otherwise. 
This  is  generally  a  question  depending  on  the  contract  between 
the  company  and  agent. 

Insurance  Brokers. 

Dejinitio7i. 
Broker  De-  "  An  insurance  broker  is  one  who  acts  as  a  middleman  between 

lined.  ("he  insured  and  the  insurer,  and  who  solicits  insurance  from   the 

public,  under  no  employment  from  any  special  company,  placing 
the  orders  secured  either  with  comjjanies  selected  by  the  insured, 
or,  in  the  absence  of  such  selection  with  the  companies  selected  by 
himself." 

10  Am.  &  Eng.  Ency.  of  La\v,  2d.  ed.  970. 
The   term    •' in'>urance    liroker "    is   generally    imderstood    to 
mean  a  person  who  owes  no  duty  or  allegiance  to  any  particidar 
corporation.      He  is  free   to    procure  insurance  for  others  in  any 
company  he  may  select,   and  to  solicit  and  procure  business  and 
patronage  for  any  insurance  company  or  companies  he  may  select. 
McKinney  v.  Alton;   41  111,  App.  512. 
The  Massachusetts  statute  defines  an  *•' insurance  broker  "  as 
follows:    "  \Vhoe\er,   for  compensation,    not  being    the  appointed 


AUTHORITY  TO  RECEIVE  NOTICE  OF  LOSS  405 


agent  or  officer  of  the  company  in  which  any  insurance  or  reinsur-    Broker  De- 

ance  is  effected,  acts  or  aids  in  any  manner  negotiating;  contracts  of   fined. 

insurance  or  reinsurance  or  phicing  risks  or  effecting  insurance  or 

reinsurance  for  a  person  other  than  himself,  shall  be  an  insurance 

liroker,  and  no  person  shall  act  as  such  broker  except  as    pro\  ided 

in  section  1*5." 

Acts  of  1907  c.  576  §  98. 

(Section  95  provides  for  licensing  brokers.) 
The  broker's  license  is  strictly  personal.      It  does  not  extend  to 
the  clerks  in  his  office.      They  cannot  do  acts  forbidden  to  persons 
not  licensed,  except  under  the  immediate  direction  of  the  licensed 
employer  or  incidental  to  the  work  as  clerk. 

2  Opinions  Atty.  Gen.  'IX'o. 
One  negotiating  insurance  in  domestic  companies,  but  not 
licensed  under  the  statute  as  an  agent  or  broker,  who  furnished  to 
a  duly  licensed  agent  the  names  of  persons  desiring  insurance,  for 
the  purpose  of  aiding  such  agent  to  effect  such  insurance,  in  con- 
sideration of  a  stipulated  share  in  the  commission  by  means  of 
which  information  such  agent  was  enabled  to  effect  such  insurance, 
is  an  insurance  broker,  within  the  statute. 

Pratt  V.  Iku-don  ;    1(>S  Mass.  596. 

Distinguished  from  Insurance  Agfents 

There  is  a  marked  and  well-detined  distinction  between  insur- 
ance brokers  and  insurance  agents  representing  corporations.  Such 
insurance  agents  during  their  employment  sustain  a  fixed  and  per- 
manent relation  to  the  companies  they  represent.  They  are  clothed 
with  general  powers  and  authority,  and  assume  responsibilities  not 
conferred  upon  or  assumed  by  brokers.  They  owe  duty  and  alle- 
giance to  the  companies  employing  them,  and  seek  patronage  only 
for  the  profit  and  benefit  of  such  companies,  and  are  precluded  from 
soliciting  insurance  business  for  others. 

16  Am.  &  Eng.  Ency.  of  Law,  2d  ed.  970. 

Agency  of  Broker 
In  general 

(a)      Ordinarily  Agent  of  Insured  in  all  matters  within  the 
scope  of  his  employment. 
Westfield  Cigar  Co.  v.  Ins.  Co.  of  No.  America;    169  Mass.  382. 

Comm.  Mut.  F.  Ins.  Co.  v.  Wm.  Knabe  &  Mfg.  Co.  ;  171 
Mass.  265. 


406 


LECTURES  ON  FIRE  INSURANCE 


173 


Insurance        Faulkner  v.  Manchester  F.  Ass.  Co.  ;    171  Mass.  349. 
Broker.  Comm.    Mut.    F.    Ins.    Co.    v.    Fairbank   Canning   Co. 

Mass.  161. 

Same  v.   Swift ;    174  Mass.  226. 
and  within  that  scope  his 
acts, 

representations,  and 
conceahnents 
are  chargeable  to  and  binding  upon  the  insured. 
Brokcr^s  Clerk. 

A.  applied  to  B.,  an  insurance  broker,  for  insurance.  B.  ob- 
tained a  policy  from  C,  agent  for  the  tlefendant  company.  After- 
ward the  defendant  requested  C.  to    cancel   and  return  the  policy. 

C.  went  to  B's  otKce,  but  finding  him  absent,  informed  D..  the  clerk 
in  charge,  that  he  was  instructed  to  cancel  the  policy,  and  requested 

D.  to  get  it  for  cancellation.  It  was  held  that  D.,  in  returning  the 
policy  for  cancellation,  acted  as  the  agent  of  A.,  and  not  as  the 
agent  of  the  defendant. 

Faulkner  v.  Manchester  F.  Assu.  Co.  :  171  Mass.  349. 
This  is  so  eyen  although  the  broker  solicits  the  insurance,  and 
the  fact  that  the  policy  is  deliyered  to  him,  and  that  by  an  arrange- 
ment or  agreement  with  the  insurer  or  with  an  agent  of  the  insurer 
he  obtains  from  either  his  compensation,  does  not  change  his  legal 
status. 

16  Am.  &  Eng.  Ency.  of  Law,  2d  ed.  pp  971-2. 
Comm.  Mut.  F.  Ins.  Co.  v.  Wm.  Knabe  &  Mfg.  Co.  171  Mass.  265 
{b)      When  Agents  of  Insurer 

(1)  When  employed  as  such. 

Of  course,  when  employed  by  the  company  as  its  agent,  all  his 
acts,  within  the  scope  of  his  agency,  will  bind  the  Company. 

(2)  Agenc\'    in    Deliyering    Policy    and   Collecting 
Premiums. 

In  some  states  it  is  held  at  common  law  that  in  those  matters 
he  is  agent  for  the  company.  (And  in  Massachusetts  it  is  fixed  by 
statute — that  the  broker  in  recei\  ing  the  premium  is  the  Company's 
agent,  whateyer  may  be  contained  in  the  polic\ .  Acts  of  1907,  c. 
576  §  96.) 

Where  the  insured  merely  tells  the  broker  to  haye  the  property 
covered,  the  broker  is  the  assent  of  t lie  insured  in  the  picking  out 
of  the  company  and  the  term  and  amount  of  the  policy,  and  if  he 
makes  a  mistake  on  these  matters,  he  does  not  bind  the   Cduipany, 


AUTHORITY  TO  RECEIVE  NOTICE  OF  LOSS  407 


but  the  insured.      For  the  time  being  in   this  particuhir  transaction   Insurance 
he  is  the  insured's  agent.  Broker. 

Bowditch  V.  Norwich   Union  Fire  Insurance  Co.  ;  193  Mass.  565. 
Accounthig  by  Broker. 

Where  custom  is  for  company  to  dehver  policies  to  liroker  and 
charge  him  with  premiums,  for  him  to  collect  premiums,  and  ac- 
count to  the  company  monthly,  company  can  sue  broker  for  prem- 
iums collected  by  him,  although  company  was  insolvent  when 
policies  were  issued  ;  but  not  for  premiums  not  paid  on  policies 
delivered  to  him,  although  policies  not  returned. 

Monitor  Mut.  F.  Ins.  Co.  v.  Young;   111  Mass.  537. 
(<:)      Effect  of  Provision  in  Policy  Declaring  Broker  Agent 
of  Assured. 

Policies  frequently  contain  a  clause  providing  that  if  any  <5;'0^er 
or  any  person  other  than  the  insured  has  procured  the  policy  he 
shall  be  deemed  to  be  the  agent  of  the  insured  and  not  of  the  insurer 
in  any  transaction  relating  to  the  insurance. 

This  has  been  held  valid ;  that  under  it  the  broker  who  obtains 
the  insurance  is  the  agent  of  the  insured,  and  that  his  representations 
will  bind  the  insured. 

(But  note  that  in  Massachusetts  by  statute  the  broker  is  the 
agent  of  the  company  always  in  the  receipt  of  the  premium.) 
2.     When  Employed  Only  to  Procure  Policy. 

The  broker's  agencv  terminates  wdien  the  policy  is  executed  and 
delivered  absolutely  to  the  insured  or  his  agent. 

Green  z'  Star  Fire  Ins.  Co.  ;  190  Mass.  586. 

If  delivery  is  conditional  on  approval  by  company  and  it  is 
not  to  take  effect  until  so  approved,  notice  by  the  insurance  com- 
pany to  the  broker  that  it  does  not  approve  the  policy  will  be  notice 
to  the  insured. 

Young  V.  Newark  F.  Ins.  Co.  ;  59  Conn.  42. 

After  unconditional  delivery  notice  to  the  broker  of  cancella- 
tion is  not  sufficient  notice  to  the  insured. 

''Assuming  that  the  contract  of  insurance  was  perfected,  so 
that  the  risk  attached,  the  defendant  fails  to  show  a  termination  of 
the  insurance  before  the  fire,  in  accordance  with  the  terms  of  the 
policy."  The  provision  is  that  "  the  insurance  may  be  terminated 
at  any  time  at  the  option  of  the  company,  on  giving  notice  to 
that  effect,  and  refunding  a  ratable  proportion  of  the  premium  for 
the  unexpired  term  of  the  policy." 


408  LECTURES  ON  FIRE  INSURANCE 


Insurance  (The  present  standard  form  says  "Notice  to  the  insured  ?inCi. 

Broker.  /^  any  mortgagee  to  whom  this  pohcyis  made  payable,"  etc.) 

The  letter  of  the  general  agent  to  Hunt  (the  broker  who  pro- 
cured the  policy),  giving  him  notice  that  the  company  did  not  wish 
the  risk  at  the  rate  named,  and  demanding  a  return  of  the  policy, 
without  an  offer  to  return  any  part  of  the  premium,  was  not  sufli- 
cient.  The  facts  do  not  conclusively  show  that  Hunt  was  the  agent 
of  the  plaintiff  to  receive  notice  of  a  termination  of  the  risk,  and 
the  provision  in  the  policy  making  the  person  who  procures  the  in- 
surance "the  agent  of  the  assured  in  all  transactions  relating  to  the 
insurance,"  cannot  be  construed  to  mean  that  such  person  shall  be 
ao-ent  to  receive  notice  of  the  termination  of  the  insurance  at  any 
time  during  the  life  of  the  policy  ;  it  plainly  refers  to  the  original 
transactions  connected  with  obtaining  it." 

White  V.  Conn.  Fire  Ins.  Co.  ;  120  Mass.  330  at  333. 
Evidence  of  a   General  Custom  in  the  Insurance  Business 
authorizing  insurance  companies  to  give  notice  of  cancellation  to 
broker  procuring  insurance  is  not  admissible. 

Where  Broker  Undertakes  to  Do  Acts  Outside  of  His  Em- 
ployment, the  question  for  whom  he  acts  depends  upon  the  special 
circumstances  of  each  case:  and  upon  the  ordinary  rules  of  evidence 
and  agency,  such  as 

(1)  Burden  of  proof  is  on  party  seeking  to  bind  the  other 
by  his  acts  to  prove  his  authority 

(2)  and,  in  absence  of  direct  authority,  to  show 

(2«)      Ostensible  authority,  or 
(2(5)      Ratification. 
3.     When  broker  is  authorized  to  represent  principal  in  all 
insurance  matters, 

his  authoritv  as  agent  not  only  extends  to 
(3ia:)      procurement  of  insurance, 

but 
(33)      modification,  or 
(3r)      cancellation  of  policies 
and 
notice  to  him  would  bind  his  principal, 

III     Licensed  lirokers. 

Where  brokers  must  be  licensed  under  statutes  (as  in  Massa- 
chusetts) bringing  together  the  protective  assured  and  the  insurer  is 
acting  as  an  insurance  agent  or  broker  and   retiuires  a  license.      If 


Rights  and 


AUTHORITY  TO  RECEIVE  NOTICE  OF  LOSS  409 

done  without  a  license  no  action  can  he  maintained  for  his  commis- 
sion h\  the  broker. 

Pratt  V.  Burdon  ;   168  Mass.  596. 

Rigfhts,  Duties,  and  Liabilities  of  Brokers. 

1.      Lien    upon    policy   and   moneys   received   thereon. 

(a)     In  general.  duties  of 

An  insurance  broker  has  a   //cf/  upon  all  policies  in  his  hands   Brokers 
procured  by  him  for  his  principal,  and  also  upon  the  moneys  re- 
ceived by  him  upon  such  policies^  for  the  payment  of  the  sums  due 
to  him  for 

(dil)     commissions, 
{a'l)      disbursements, 
(a3)      advances,  and 
(^•4)      services 
in  or  about  the  policies. 

But  the  lien  does  not  extend  to  cover  any  balance  due  upon  business 
foreign  to  that  of  effecting  insurance. 

The  mere  intermixing  of  charges  in  reference  to  policies  with 
other  items  in  general  account  is  not  a  waiver  of  the  lien. 
16  Am.  &  Eng.  Ency.  of  Law,  2d  ed.  974. 
(/^)      When  broker  is  employed  by  agent. 

(1)  When  broker  knows  of  agency. 

When  the  broker  knows  that  the  person  who 
employs  him  is  merely  the  agent  for  the  party 
insured,  he  has  a  lien  for 
(la)      the  premiums  paid  by  him 
(1(5)      his   commissions    on    the   policies  which   he 

effects  but  not  for 
(Ic)      general  balance  of  his  insurance  account  with 
the  agent. 
16  Am.  &  Eng.  Ency.  of  Law,  2d  ed.  974. 
This  is,  of  course,  on  the  familiar  ground  that  he  can  only  hold 
a  known  principal  for  the  debts  of  the  principal. 

(2)  When  broker  does  not  know  of  agency. 

he  has  a  lien  for  such  general  balance  of  his 
insurance  account,  and  has  a  right  to  apply  money  received  upon 
the  policy  to  the  satisfaction  of  that  balance, 

as  well  after  as  before  notice  that  it  belongs 
to  a  third  person. 


4 JO  LECTURES  ON  FIRE  INSURANCE 


16  Am.  &  Eng.  Ency.  of  Law,  2a  cd.  pp.  l»74-5. 

(c)  Extinguishment  of  lien  by  parting  with  poHcy, 
l\y  their  delivery  to  insured,  or  his  agent. 

{(/)      Re-attachment  of  lien  upon  repossession  of  policy. 

(dl)      Lien    revives    if    policies    again    come    into 
broker's   hands  from    person   against    whom 
right  originally  existed, 
but  //o^  if 
(d2)      come  as  property  of  some  other  person,  or 
(</3)      intervening  equities,  nor 

if  broker's  manner  of  parting  with  policies 
manifested  an  intention  to  abandon  the  lien. 
2.      Duty  and  liability  to  principal. 
(a)      In  general — 

15rokers  hold  themselves  out  to  have  requisite  knowl- 
edge and  ability  to  transact  the  business  and  are  bound 
to  use  reasonable 
(al)      skill 
{a2)      care,  and 
(a3)      diligence 
If  they  fail  in  any  of  these  respects  and  their  employers  suffer 
loss  proximately  arising  therefrom,  they  are  liable  for  the  loss  so 
sustained. 

(d)  When  broker  recei\es  instructions  from  principal  he 
is  bound  to  obey  and  is  liable  for  any  loss  arising  from 
his  failure  to  do  so. 

(c)  When  matter  is  left  to  broker's  discretion,  if  he  acts  in 
good  faith,  with  reasonable  diligence,  and  judgment, 
and  due  regard  for  his  employer's  interests,  he  will 
not  be  liable  for  a  loss  arising  from  his  error  in 
judgment. 

(d)  Liability  for  fraud  in  anv  manner  is  of  course  complete. 


QUESTIONS 

1.  A.  asks  B.  to  place  all  his  insurance  for  him.  B.  goes 
to  C.  and  D.  co-partners  and  they  place  the  insurance  in  com- 
panies represented  by  them,  (a)  Is  B.  an  insurance  agent?  (d) 
Is  he  the  agent  of  A.  or  of  C.  and  D.  in  the  transaction? 

2.  In  the  case  just  stated,  if  C.  and  D.  notify  B.  that  certain 


MASSACHUSETTS  STATUTE  LAW  OF  AGENCY  4It 


of  the  policies  so  issued  by  them  have  been  cancelled  by  the  com- 
panies, are  the  companies  freed  from  liability  to  the  assured  by 
such  notice? 

8.  How  far  can  the  general  agent  of  an  insurance  company 
bind  the  company  by  his  acts  or  statements? 

(a)  How  far  can  his  clerks  bind  the  company? 

4.  If  a  local  agent  of  an  insurance  company  issues  its  policy 
to  a  person  whom  he  knows  to  be  conducting  his  business  in  a 
manner  forbidden  by  the  terms  of  the  policy  as  issued,  is  the 
company  liable  to  the  assured  in  case  of  loss? 

5.  How  far  is  a  person  dealing  with  an  ordinary  agent  (as 
distinguished  from  a  general  agent)  of  an  insurance  company 
bound  by  any  limitations  on  his  authority  made  by  the  company? 

6.  What  is  ostensible  or  apparent  authority  of  an  agent? 

(a)  of  what  importance  is  this  question  in  Massachusetts  as 
applied  to  fire  insurance  agents? 

7.  Can  an  agent,  in  any  event,  bind  his  company  by  policies 
of  fire  insurance  issued  by  him  after  the  company  has  notified  him 
of  the  termination  of  his  agency? 

8.  If  an  insurance  broker  causes  a  loss  to  the  person  employ- 
ing him,  under  what  circumstances,  if  anv,  is  he  liable  to  his  cus- 
tomer for  the  loss? 

9.  Wliat  is  a  misrepresentation  in  an  application  for 
insurance  ? 

10.  How  can  an  agency  be  terminated? 

MASSACHUSETTS  STATUTE  LAW  OF  AGENCY 

Massachusetts    is  a  common    law   state;  Louisiana    is   a  civil   Statute  vs. 
law  state:  other  states  reduce  the  law  to  codes.  Common 

The  common  law  is  an  outgrowth  of  a  long  series  of  judicial 
decisions  in  England  and  Massachusetts.  Statutes  governing 
conduct  in  Massachusetts  are  the  creation  of  the  Great  and  Gene- 
ral Court  or  of  the  Congress  of  the  United  States  of  America. 
Statutes  govern  if  in  conflict  with  common  law,  and  many  times 
add  to  common  law  or  cover  points  not  decided. 

Under  common  law  any  man  could  practice  medicine  or 
dentistry  or  engage  in  any  other  lawful  profession  or  business; 
but  statutes  provide  for  licensing  only  trained  and  competent  men 
to  practice  certain  vocations,  among  which  is  insurance.  Con- 
sequently a  knowledge  of  the  statutes  is  vitally  necessary. 


La^v. 


412 


LECTURES  ON  HRE  INSURANCE 


Government 
Supervision 
of  Insurance 
Agents. 


Domestic 
Companies 
Limit  of 
Salaries. 


Limit  of 
Agreement. 


No  Guar- 
antees against 
Assessments. 


The  Insurance  Department  is  believed  to  be  inclined  to  draw 
the  lines  even  more  strictly  in  the  future  as  to  the  competency 
and  reliability  of  persons  desiring  to  be  licensed  as  insurance 
agents  or  brokers.  But,  as  common  law  governs  in  the  absence 
of  statute,  a  knowledge  of  the  principles  of  the  common  law 
which  still  apply  to  agents  of  insurance  companies  is  quite 
essential. 

To  engage  in  the  business  of  insurance  agent  in  Massachu- 
setts requires: — 

1.  Select  your  company  or  companies  and  ask  for  appoint- 
ment. 

(a)  They  must  be  either  Massachusetts  companies,  or 
foreign  companies  (foreign  company  means  organized  out- 
side of  Massachusetts)  which  have  been  duly  admitted  and 
still  retain  the  right  to  do  business  in  Massachusetts  through 
licensed  resident  agents. 

2.  If  a  Massachusetts  company: — 

(a)  lis  officers^  or. 

{b)  any  person    appointed    for   that   purpose,   or   acting 

without  compensation  may,  without   other   qualifications   act 

in  the  negotiation  and  transaction  with  such  company  of  any 

insurance  business  which  such  company  may  lawfully  do. 

No  license  is  now  required  in  this  case;  but  such  authority 
expires  June  30,  1912,  and  every  new  agent  of  a  domestic  com- 
pany must  be  licensed. 

Domestic  companies  cannot  pay  any  salaries  to  any  ofHcer, 
trustee,  or  director  thereof,  nor  any  salary  or  compensation  or 
emolument  amounting  in  any  year  to  more  than  $5,000  to  any 
person,  firm,  or  corporation  unless  first  authorized  by  a  vote  of 
the  directors. 

No  such  company  shall  make  any  agreement  with  any  of  its 
officers,  trustees,  or  employees  to  extend  be}ond  three  years  from 
the  date  of  such  agreement. 

Nor  shall  such   company  pav  an\-  pensions  whatever. 
Acts  of  1907,  c.  -jK),  §  27. 

"A  director  or  other  officer  of  a  mutual  fire  insurance  com- 
pan\-  who  officialh'  or  privately  gives  a  guarant\-  to  a  policy 
holder  thereof  against  an  assessment  for  which  such  policy  holder 
is  liable  shall  be  punished  bv  a  fine  of  not  more  than  $100  for 
each  offence. " 

Acts  of  1907,  c.  576,  §  115. 


MASSACHUSETTS  STATUTE  LAW  OF  AGENCY  413 


"A    paid    officer   of   a  domestic   mutual    insurance   company   Must  not 
who  asks  for,  receives  or  procures  to  be  obtained  or  uses  a  proxy   get  or  use 
in    violation    of    section     43  (providing   for   voting   bv    proxy    at   Proxies, 
annual    meetings    of   such    fire   companies   and    forbidding  use  or 
procuring  of  proxies  by  its  officers)  or  section  82  (relating  to  such 
life  companies)  shall   be  punished  bv   fine  of  not   less   than   $100 
nor  more  than  $300  for  each  offence." 

Acts  of  1907,  c.  576,  §   116. 

3.    If    a    foreign    company    lawfully    doing   business    in    this    Agentsfor 
state :—  Foreign 

Cnm 

(a)     The  compan\-  must  send  written  notice   to   the    insur- 

. "  .  r     1  ■  -1    panies. 

ance  commissioner  ot   the  appointment   accompanied 

by  (d)  a    statement   under   oath   of   the   appointee   on 

blank    form    furnished    by  the  commissioner   giving 

his: — 

1.  Age 

2.  Residence  {zvliich  must  be  in  the  state) 

3.  Present  occupation 

4.  Occupation  for  five  years  next  preceding  date 
of  notice,  and, 

5.  Such  other  information  as  required  bv  the  com- 
missioner. 

(c)     If  the  commissioner  is  satisfied   that  the  appointee    is   License, 
a  suitable  person  he  issues  a  license  stating: — 

1.  That  the  compan\'  is  authorized  to  do  business 
in  the  Commonwealth. 

2.  That  the  person  named  is  the  constituted  agent 
of  the  company  in  this  Commonwealth  for  the 
transaction  of  such  business  as  it  is  authorized 
to  transact  herein. 

{d)     The  commissioner,  for  cause  shown  and  after  a  hear-   Revocation, 
ing  can   determine   the  person  unsuitable  and   revoke 
the  license  and  notify  the  company, 
(e)      Otherwise   the   license  expires   the  30th  of  June  next 
after  issue. 

1.    But    it   may,   in   the   discretion   of   the    commis-    Renewal 
sioner,  be  renewed  for  a  succeeding  year  or  years   Certificates, 
by   a   renewal    certificate   without   the   commis- 
sioner    requiring     the      detailed      information 
required  by  this  act. 
(y)     A    foreign    company   pays   a    fee    of  $2    for   agent's 
license  or  renewal. 


414 


LECTURES  ON  FIRE  INSURANCE 


Agent's  Li- 
cense Per- 
sonal. 


is')     \\  hile  the    license    is    in   force,  a  foreign  compan\-  is 
bound    by    acts   of   the  person   named    therein  within 
///s  apparent  authority  as  its  acknoivledged  age}it. 
{Ji)      The  penalty   for   acting  as  agent   of   a    foreign   com- 
pany without   a   license  or  after  revocation    is   a    fine 
not  exceeding  $-'')00. 
(/)     Present   licenses  and   authority  of   agents  of   domestic 
companies  cease  June  ;:}0,  1912. 
The  agent's   license    is  a  personal   one.      It   cannot   be  trans- 
mitted to  another. 

2   Opinions  of  Att\-.  Gen.  2. 

''Jan.  10,  1899. 
"Hon.  Frederick  L.  Cutting, 

"Insurance  Commissioner. 
"Dear  Sir:— 

"Your  letter  of  Dec.  16,  1898,  requests  the  opinion  of  the 
Attorney-General  upon  the  following  question:  'Can  the  au- 
thority of  a  person  duly  appointed  by  an  insurance  company,  and 
licensed  by  this  department  as  an  insurance  agent,  be  delegated 
to  another  by  power  of  attorne\  ?' 

"It  is  impossible  to  answer  \our  question  generalK.  I  can 
conceive  of  cases  where  the  agent  might  act  b\-  attorne\-,  clerk  or 
sub-agent.  Ordinarily,  however,  such  an  appointment  is  per- 
sonal in  its  nature,  and  cannot  be  transmitted  to  another. 

"The  specific  question  in  vour  letter,  intended  to  illustrate 
}  our  general  question,  to  wit,  whether  an  authorized  agent  can 
delegate  to  another  the  power  of  countersigning  a  policy,  is  one 
that  does  not  concern  }our  office.  Whether  the  policy  is  duly 
issued  is  a  question  for  the  parties,  not  for  you. 

Yours  very  truly, 

HosEA  M.  Knowlton, 

Attorney-  General." 

A  corporation  may  not  be  licensed  as  agent. 
2   Opinions  of  Atty.  Gen.  299. 

Certificate  of  Authority- 
Form  of  Cer-  Be  it   known  that   A.  B.  of  N.  in   the  County  of   N.  State  of 
tificatc  of         Massachusetts,  is  appointed  and  by  these  presents  duly  constituted 
Authority.      agent    of    the    Royal    Exchange   Assurance    with     full    power   to 
receive  proposals  for   insurance  against   loss  or  damage  by  fire  in 
N.  and   vicinity   to  receive   moneys    in  payment    of   premiums   to 
countersign,  issue  and  consent  to  the  transfer  of  policies  of  insur- 
ance subject  to  the  rules  and  regulations  of  the  corporation  and  to 
such    instructions    as    may    from    time    to   time   be    given   by    the 
undersiened. 


Corporation 
Cannot  be 
Licensed. 


MASSACHUSETTS  STATUTE  LAW  OF  AGENCY  415 


Having  received  your  license  and  certificate  of  authority  to 
represent  a  foreign  company,  or  your  appointment  as  agent  of  a 
domestic  company,  certain  statute  requirements  immediately 
apply:— 

((?)  Be  careful  as  to  the  nature  of  all  signs  displayed  in 
your  office  or  on  its  outside  walls,  and  also  as  to  all 
printed  matter  distributed  by  you. 

1.  Domestic  company  must  specify  on  all  signs,  cards,  pam-    Location, 
phlets  and  advertisements  exhibited  or  issued   by  them  the  city  or 

town  in  which  the  company  they  represent  is  located. 
Acts  of  1907,  c.  576,  §  26. 

2.  When  any  company,  domestic  or  foreign,  publishes  its  Assets  and 
assets  it  shall  in  the  same  connection  and  with  equal  conspicu-  Liabilities, 
ousness  publish    its  liabilities  computed   on  the  basis  allowed   for 

its  annual  statements,  and  any  publication  purporting  to  show  its 
capital  shall  exhibit  only  the  amount  of  such  capital  as  has  been 
actually  paid  in  cash.  wSuch  publications  shall  be  held  to  include 
all  policies,  renezvah,  sig)is,  circulars,  cards  or  other  means  by 
which  public  announcements  are  made. 

Acts  of  1907,  c.  576,  §  109. 

Look  out   when   the  church    fair  or   the  Odd    Fellows  bazaar   Advertise- 
ask  you  to  advertise   in  some  paper  published    in  connection  with   ments. 
their  money  separating  project  that  you  comply  with  this  law;  or 
else,  if  you    issue   or  circulate  an  advertisement   in  violation,  you 
will  be  liable  to  a  fine  of  not  less  than  $50  nor  more  than  $500. 
Acts  of  1907,  c.  576.  JJ  109. 

Having  made  sure  that  your  companies  are  duly  authorized 
to  do  business,  that  their  advertisements  are  all  right,  and  your 
license  in  force,  you  will  doubtless  begin  at  once  to  solicit  or  ne- 
gotiate insurance. 

A  good  definition  of  what  constitutes  the  transaction  of  an 
insurance  business  by  an  agent  is  given  in  Roche  v.  Ladd,  1  Allen 
4:^6.  441. 

"The  facts  that  the  president  of  the  insurance  company  was   Definition  of 
at   the  office  of  the  agent  soliciting  business;  that  the  defendants   Insurance 
were  invited  by  the  agent  to  go  there  to  meet  him ;  that  the  appli-   Negotiation, 
cation    for   insurance  was  made   by    the   defendants   to   the  agent, 
and   that   he    suggested    the   company    with    which    it    should   be 
effected;  that   he  had   the  sign  bearing  the  name  of  the  company 
put  up  in  his  office;  that   he    informed   applicants  what   the  rates 
of  insurance  would   be;  that   he  received  and   foi  warded  api^lica- 
tions  and  received  and  returned  policies;  that  he  was  paid   for  all 


416 


LECTLFRES  ON  HRE  INSURANCE 


Agent  De- 
fined by 
Statute. 


Contract  of 

Insurance 

Defined. 


his  services  by  the  company;  and  that  the  notes  for  the  premium 
were  sent  to  him  in  blank,  and  filled  up  and  executed  in  his 
office  when  the  policies  were  delivered;  all  tended  to  show  that 
he  was  not  a  mere  agent  to  receive  and  forward  papers,  but  was  an 
agent  employed  to  solicit  and  procure  business  for  the  insurance 
company,  and  to  transact  it  for  them  within  this  Commonwealth." 

And  the  statutes  tell  you  that  "A  person,  not  a  duly 
licensed  insurance  broker^  who  for  compensation  solicits  insur- 
ance on  behalf  of  any  insurance  company  or  transmits  for  a  person 
other  than  himself  an  application  for  or  a  policy  of  insurance  to 
or  from  such  company,  or  offers  or  assumes  to  act  in  the  negotia- 
tion of  such  insurance,  shall  be  an  insurance  agetit  within  the 
intent  of  this  act  and  shall  thereby  become  liable  to  all  the  duties, 
requirements,  liabilities  and  penalties  to  which  an  agent  of  such 
company  is  subject." 

1907,  c.  57(i,  §  98. 

The  statutes  also  define  a  "contract  of  insurance"  as 
follows : — 

"A  contract  of  insurance  is  an  agreement  by  which  one  party 
for  a  consideration  promises  to  pay  money  or  its  equivalent  or  to 
do  an  act  valuable  to  the  assured  upon  the  destruction,  loss  or 
injury  of  something  in  which  the  other  party  has  an  interest," 
etc. 

1907,  c.  576,  §  o  in  part. 
Commonwealth  v.  Weatherbee ;  105  Mass.  160. 

Of  course  this  definition  covers  property  and   lives  both. 
Limitation  of  Your  first  care  (but  this  is  not  likely  to  seriously  trouble  you 

Risk.  at  the  outset  of  your  career)  will   be  to  see   that   no  single  risk   is 

taken  by  any  of  your  companies  through  your  agency  which  shall 
exceed  in  amount  one  tenth  of  the  net  assets  of  the  company. 

Such  a  risk   is  prohibited  by  1907,  c.  576,   Jt   20,   unless  the 
Company  has  provided    for   reinsurance    of  the  excess   over   said 
limit,  to  take  effect  simultaneously  with  the  original  contract. 
Reinsurance.  ^   contract   of   reinsurance   is    not    a   contract    of    insurance 

"on  property"  within  the  meaning  of  Acts  of  1907.  c.  576  §  60, 
and  such  contracts  need  not  be  in  the  standard  form  required  bv 
that  section. 

2  Opinions  of  Atty.  Gen.  Apr.  6,  1900. 

Excessive  In  Attorney-General  v.  Insurance  Companv:   181  Mass.  522, 

Risk  Outside  the  defendant,  a   foreign  corporation,  but   authorized   to  do  busi- 

ot  btate.  pggg  J,-,  jj^jg  gtate^  insured    in  California,   in  a  single  risk,  a  larger 

amount  than  one  tenth  of   its  net  assets.      Held,   in  an  opinion   bv 


MASSACHUSETTS  STATUTE  LAW  OF  AGENCY  417 


Holmes,  C.  J.,  that  the  prohibition  of  section  20  did  not  apply. 
But  since  then  this  section  has  been  amended  with  a  purpose 
apparently  to  make  it  appl\  to  risks  in  other  states. 

The  insurance  commissioner  of  another  state  has  ruled  that 
where  insurance  was  placed  on  separate  buildings  even  though 
divided  only  by  fireproof  walls  and  owned  bv  the  same  partv,  each 
section  was  a  risk  by  itself.  But  this  would  not  be  a  safe  prece- 
dent to  follow  in  this  Commonwealth. 

Next  take  care  to  verifv  anv  representations  or  warranties 
made  b\  the  assured  or  in  his  behalf  for  section  21  of  chapter  576, 
Acts  of  1907,  provides: — 

"No  oral    or  written  misrepresentation  or  warrant\   made    in   Misrepresen- 
the  negotiation  of  a  contract  or  policy  of  insurance  by  the  assured   tations  or 
or  in   his   behalf  shall   be  deemed  material  or  defeat  or  avoid   the   Warranties, 
policy  or  prevent   its    attaching  unless  such  misrepresentation    or 
warrantv  is  made  with  actual  intent  to  deceive  or  unless  the  matter 
misrepresented  or  made  a  warrantv  increased  the  risk  of  loss." 

Actual  intent  to  deceive  is  not  alwavs  easv  to  prove  nor  is 
the  fact  that  the  matter  misrepresented  or  warranted  increased  the 
risk. 

The   word    "negotiation"    means    the    entire   transaction    of   Negotiation, 
apphing  for  and   finallv  issuing  the  completed  contract   of  insur- 
ance, and  these  provisions  apply  to  warranties  which  are  inserted 
in  the  policv  itself. 

Everson  :•.  General  Accident  Asso.  :  202  Mass.  169. 

As  to  mere  misrepresentations,  section  21  is  only  declarative 
of  the  common  law. 

But  as  to  warranties  it  makes  a  new  rule.  It  deals  with  all 
representations  (misstatements)  made  in  negotiating  the  policv 
whether  the  statement  is  said  b\-  the  parties  to  be  a  warrant\-  or  a 
representation,  and  both  are  placed  on  the  same  footing. 

White  t'.  Provident  Savings  Life  Assurance  Society  of  New 
York:  168  Mass.  108. 

It  does  not  appl\-  to  statements  incorporated  in  the  policv 
and  there  made  express  warranties. 

As   to   these  last  mentioned,  if  the  statement    is  construed   at 
common   law    as  a   warrantv  and    is    untrue,  it    is    fatal,    whether 
material  or  immaterial  to  the  risk. 
Miles  V.  Connecticut  Mutual  Life  Insurance  Co.  ;  3  Grav  580. 

Your  examination  of  the  propert\' sought  to  be  insured  should 
be  careful  not  onl\-  for  the  reason  just  referred  to  but  in  view  of 
the  statute  provisions  against  over-insurance. 


418  LECTURES  ON  FIRE  INSURANCE 


See  section  57  of  chapter  576,  Acts  of  1907. 

Over-valua-  "No  insurance  compan\' shall  knowingh-  issue  anv  fire  insur- 

tion.  ance   policy    upon   property   within    this    Commonwealth    for   an 

amount  which   with   existing   insurance   thereon  exceeds   the   fair 

value  of  the  property." 

Limitation  of  ''If  buildings  insured  against  loss  b\-  fire,  and  situated  within 

Loss.  this   Commonwealth,  are  totally   destrox  ed   b\-   fire,  the   company 

shall  not  be  liable  beyond  the  actual  yalue  of  the  insured  property 

at  the  time  of  the  loss  or  damage;   and    if  it  shall  appear  that   the 

insured  has  paid  premiums  on  an  amount  in  excess  of  said  actual 

value,  the  assured  shall  be  reimbursed  the  proportionate  excess  of 

premiums  paid   on  the  difference  between   the  amount   named   in 

the  policy  and  said  actual  value,  with    interest  at  six  per  cent  per 

Rebate  of        annum   from  the  date  of   issue;  and  said  excess  of  premiums  and 

Premiums  on  interest  thereon  shall   be  allowed  the   insured   from  the  time  anv 

Over-insur-     company  or  companies  carrying  said  insurance  at  the  time  of  the 

ance.  ^°^^    have    continuously    carried    the    insurance   on   the   destroyed 

building  or  buildings,  whether  under  policies  existing  at  the  time 

of   the    loss   or   under  previous   policies    in   the  same  company  or 

companies. " 

And   }ou  must   make  reasonable   inquiry  as   to  other  existing 

insurance. 

Non-employ-  You  cannot  employ  any  officer  or  other  person  whose  duty  it 

mcnt  of  Cer-   is  to   determine  the  character  of  the  risks,  and  upon  whose   deci- 

tain  Officers    sion  the  application  shall  be  accepted  or  rejected  by  a  mutual  fire 

insurance  cofnpany  (for  which    you    are    agent)  and    if   a    mutual 
Fire  Insur-        ,-        •  '  ^  '  ■        ^ 

„  hre  insurance  company  employs  you    in  that   capacity  vou  cannot 

receive  as  any  part   of  your   compensation   a    commission   on   the 

premiums,  but  your  compensation  must  be  a  fixed   salary;   and,  if 

the  directors  so  determine,  a  share  of  the  net  profits. 

1907  c.  576,  i^  42. 

Seven-Year  You  cannot  issue  a  policy  to  run  more  than  seve/i  years. 

Limit.  1907,  c.  576,  §  57. 

Political  Con-  Certain    special    inducements  to   procure    insurance  are   for- 

tributions         bidden  by  law.      No  company  can    directly  or    indirectly  make  or 

Prohibited.      agree  to  make  political  contributions. 

Acts  of  1907,  c.  576,  §  22. 
And    any    agent  who   participates    in,    aids,   abets,  advises  or 
consents  to  a  violation  of  this  section    is   liable   to    imjDrisonment 
not  over  one  year  and  a  fine  of  not  over  $1,000. 

Rebates  Pro-  No  company  or  agent  can  give  or  take  rebates  or  offer  special 

hibited.  inducements  to  insure  (Acts  of  1908,  c.  511)  under  ]:)enalt\  of  fine 

of  not  over  $200. 


MASSACHUSETTS  STATUTE  LAW  OF  AGENCY  419 

But  this  does  not  apply  to  marine  insurance,  nor  prevent  the 
company  from  paying  commissions  to  other  companies  or  to  any 
person  who  is  a  duly  authorized  agent,  sub-agent,  or  broker  and 
who  holds  himself  out  and  carries  on  business  in  good  faith  as 
such;  nor  "prevent  an  insurance  company  or  such  a  person  from 
receiving  a  commission  in  respect  to  any  policy  under  which  it 
itself  or  he  himelf  is  insured." 

Many  companies  have  lists  of  "prohibited  risks"  and  furnish  Prohibited 
them  to  their  agents  with  instructions  to  decline  them.  If  the  Risks, 
agent  issues  a  policy  upon  such  a  risk  the  company  would  be 
bound  by  his  action  as  "within  the  apparent  scope  of  his  author- 
ity" until  it  is  able  to  properly  cancel  the  policy.  If  the  agent 
often  disregards  the  instructions  of  the  company  in  this  respect 
he  is  not  likely  to  hold  down  his  job. 

Issuance  of  Policies 

1.  Evei'y   domestic  and   foreign  company   shall   conduct   its   Name  of 
business  in  this  Commonwealth    in   the  name   by  which    it   is   in-   Company, 
corporated,  and   the  policies  and  contracts  of  insurance  issued  by 

it  shall  be  headed  or  entitled  only  by  such  name. 
Acts  of  1907,  c.  576,  §  18. 
The  statute  restriction  that  companies  may  do  business  only 
under  their  own  name  was  enacted  to  meet  a  condition  of  the 
business  caused  by  the  issuance  by  combinations  of  companies  of 
so-called  'joint"  policies  and  by  the  "Underwriters"  policies 
which  were  put  out  by  some  companies  individually  and  by  others 
in  combination. 

"On  the  filing-back  of  every  such  policy  there  shall  be 
printed  or  stamped  in  clear  type  not  smaller  than  long  primer  the 
words:  'In  case  of  fire  notify  the  company  or  its  local  agent  at 
once  in  writing. '  " 

Acts  of  1910,  c.  552  §  2. 

And  you  must  of  course  report  or  forward  such  notice  at 
once  to  the  company. 

"In  all  insurance  against  loss  by  fire  the  conditions  of  insur-   Conditions 
ance  shall    be   stated    in    full,  and    neither   the  application  of   the   in  Full, 
insured  nor  the  by-laws  of   the  company  shall    be  considered  as  a 
warranty  or  a  part  of  the  contract,  except  so  far  as  they  are  incor- 
porated in  full   in  the  policy." 

Acts  of  1907,  c.  576,  ?j  59. 

2.  All    policies    must    be    issued    in   the   "standard    form" 


420 


LECTURES  ON  FIRE  INSURANCE 


Standard         prescribed    by    Acts    of   1907,    c.    -xG,   Jj   60,  except   as   stated   in 

Form.  said  section: — 

First:  "A  company  may  print  on  or  in  its  policies  its  name, 
location  and  date  of  incorporation,  plan  of  operation,  whether 
stock  or  mutual,  and  if  the  former,  the  amount  of  its  paid-up 
capital  stock,  the  names  of  its  officers  and  agents,  the  number  and 
date  of  the  policy,  and,  if  it  is  issued  through  an  agent,  the 
words  'This  policy  shall  not   be  valid  until  countersigned   by  the 

duly    authorized    agent   of    the    company    at ,'    and, 

if  a  mutual  company,  may  fix  the  contingent  mutual  liability  of 
its  members  for  payment  of  losses  and  expenses  not  provided  for 
by  its  cash  funds. 

Second:  A  company  may  print  or  use  in  its  policies  printed 
forms  of  description  and  specification  of  the  property  insured. 

Third:  A  company  insuring  against  damage  by  lightning 
may  print,  in  the  clause  enumerating  the  perils  insured  against, 
the  additional  words  "Also  any  damage  by  lightning,  whether 
fire  ensues  or  not, "  and.  in  the  clause  providing  for  an  appor- 
tionment of  loss  in  case  of  other  insurance,  the  words  "whether 
by  fire,  lightning  or  both." 

Fourth:  A  company  incorporated  or  formed  in  this  Com- 
monwealth may  print  in  its  policies  any  provisions  which  it  is 
authorized  or  directed  1)y  law  to  insert  therein;  and  any  company 
not  incorporated  or  formed  in  this  Commonwealth  may,  with  the 
approval  of  the  insurance  commissioner,  so  print  anv  provision 
required  l)y  its  charter  or  deed  of  settlement,  or  In-  the  laws  of 
its  own  state  or  country,  no/  contrary  to  the  laxvs  of  this  Com- 
monwealth^  but  the  insurance  commissioner  shall  require  any  pro- 
vision which,  in  his  opinion,  modifies  the  contract  of  insurance  in 
such  way  as  to  affect  the  question  of  loss,  to  be  appended  to  the 
policy  by  a  slip  or  rider  as  hereinafter  provided. 

Fifth:  The  blanks  in  said  standard  form  may  be  filled  in 
print  or  writing. 

Sixth:  A  company  may  print  upon  policies  issued  in  com- 
pliance with  the  preceding  provisions  of  this  section  the  words, 
"Massachusetts  Standard  Policy." 

Seventh:  A  compan\  may  write  upon  the  margin  or  across 
the  face  of  a  policy,  or  write,  or  print  in  type  not  smaller  than 
long  primer,  upon  separate  slips  or  riders  to  be  attached  thereto, 
provisions  adding  to  or  modif\ing  those  contained  in  the  standard 


MASSACHUSETTS  STATUTE  LAW  OF  AGENCY  421 

form;   and  all  such  slips,  riders  and  provisions  must  be  signed  by 
the  officers  or  agent  of  the  company  so  using  them. 

In    Hardy  z'.  Lancashire   Ins.    Co.,  16G   Mass.  210,  the  rider   Rider  Pre- 
differed    from   the   bodv  of   the  policv   in  several   particulars,  but   vails, 
prevailed. 
See  also  Quinn  v.  Fire  Asso.  of  Philadelphia;  180  Mass.  -IGO. 

3.  No  company  doing  business  in  this  Commonwealth  shall    Must  not 
make,  issue  or  deliver  therein  an\-  polic}-  or  contract  of  insurance   ^"^* 

containinor  an^•thing  depriving  the  courts  of  this  Commonwealth   ,.    . 

,..,..-     r        ■  ■  ■  ,•     .  •  ,  r  limit  time, 

of  jurisdiction  of  actions  against   it  or  limiting  the  time  for  com- 
mencing actions  against   it  to  less  than  two  \  ears   from   the   time 
when  the  cause  of  action  accrues. 
Such  a  provision  is  z'o/d, 

4.  "An  insurance  company  or   agent  who   makes,  issues  or   Penalty  for 
delivers  a  polic\   of   fire  insurance  in  willful  violation  of   the  pro-   Violation, 
visions  of  section  sixty  shall    forfeit   not  less    than   $50   nor   more 

than   $200    for   each    offence;  but   such    polic\-   shall    be   binding  Policy 

upon  the  compan\-  issuing  the  same."  Binding. 
Acts  of  1907,  c.  .")76,  >^  114. 
Hewins  v.  London  Assu.  Corpn. ;   184  Mass.  177. 

"  A  policy  so  issued  must  be  construed  as  it  reads  and  not  as  if  Construc- 

it  were  in  the  standard  form."  *^o"* 

"According  to  the  recent  ruling  of  Judge  Bell  in  the 
superior  court,  in  regard  to  a  foreign  insurance  company  con- 
tracts executed  without  the  state  are  binding  here. 

"His  decision  awarded  the  plaintiff  $18,507.92  in  the 
suit  of  Theodore  W.  Stone,  receiver  of  the  Electric  Mutual 
Casualty  Association  of  Philadelphia  against  the  Old  Colony 
St.  Ry.  Co.  He  found  for  the  defendant  in  set-off  for 
$1,595.54.  He  reported  the  case  to  the  full  bench  of  the 
supreme  court. 

"The  insurance  company  was  organized  to  do  business 
of  accident  insurance  on  the  mutual  assessment  plan.  Policies 
were  issued  to  street  railway  companies,  now  consolidated 
under  the  name  of  the  Old  Colon\-  St.  Ry.  Co.,  the  defen- 
dant in  this  action. 

"The  defendant  companv  set  up  in  defense  that  the  pol- 
icies of  insurance  were  invalid  for  the  reason  that  the  insur- 
ance company  had  not  complied  with  the  insurance  laws  of 
this  state. 

"The  judge  finds  the  contracts  were  made  in  Penns\l- 
vania,  were  to  be  performed  there  and  were  valid  under  the 
laws  of  that  state." 


422 


LECTURES  ON  FIRE  INSURANCE 


Oral  Con- 
tracts. 

Agent  for 
Company. 


•5.      There    is  nothing  in  the  laws  to  prevent  companies  from 
making  oral  contracts  of  insurance. 
Brown  v.  Franklin  Mutual  Fire  Insurance  Co.  :  IGo  Mass.  56-3. 
An  agent  or   broker  acting   for  another  person    than   himself, 
shall  for  the  purpose  of  receiving  premiums  he  held  as  the   assent 
of  the  company  iv  hat  eve?'  may  be  in  the  policy. 
Acts  of  1907,  c.  .")76,  >;  96. 

"The  statute  of  1861,  c.  170  (since  repealed  and  re-enacted 
in  a  modified  form)  relating  to  agents  of  insurance  companies, 
does  not  change  the  rules  of  the  common  law  regulating  the  power 
of  agents  to  bind  their  principals;  it  only  defines  what  classes  of 
persons  shall  be  deemed  so  far  agents  of  insurance  companies  as 
to  be  lia])le  to  the  penalty  prescribed  b\-  Gen.  Sts.  c.  58,  §  77." 

■'If  a  polic\-  of  fire  insurance  contains  a  clause  providing 
that  any  person  other  than  the  assured,  who  may  have  procured 
the  insurance  to  be  taken,  shall  be  deemed  to  be  the  agent  of  the 
assured,  the  assured  is  bound  by  representations  made  by  an 
insurance  broker,  who  obtains  the  insurance." 

Wood  V.  Firemen's  Fire  Ins.  Co.  ;  126  Mass.  316. 

„       .  And  if  the  ag-ent  or   broker   knowing-h'  procures  payment,  or 

Premiums,  ^  fc>  .    i  r    . 

etc.  Obtained  ^'''^'  obligation  for  payment,  of  the  premium  by  fraudulent  repre- 
by  False  Rep- sentations.  he  is  liable  to  a  fine  of  not  less  than  $100  nor  more 
resemations.    than  $1,000  or  imprisonment  for  not  more  than  one  \  ear. 

Acts  of  1907,  c.  .376,  §  96. 
Definition.  ^^  '*  person  makes  a  representation  of  a  present  fact  which  he 

either  knows  to  be  false,  or  ought  to  have  known  to  be  false,  with 
the  intent  that  the  person  to  whom  he  makes  the  representation 
shall  act  on  it,  and  the  person  does  act  on  it,  and  is  damaged  by 
so  doing,  this  is  an  actionable,  fraudulent  representation. 

And  it  makes  no  difference  whether  or  not  the  party  making 
the  representation  believes  it  to  be  true,  if  he  makes  it  recklessly 
or  willfully  and  without  proper  investigation. 


Brokers 

Definition  of  "Whoever,  for  compensation,  not  being  the  appointed  agent 

Broker  ^^  officer  of  the  company   in  which  any  insurance  or  reinsurance 

is  effected,  acts  or  aids  in  any  manner  in  negotiating  contracts  of 
insurance  or  reinsurance  or  placing  risks  or  effecting  insurance 
or  reinsurance  for  a  person  other  than  himself  shall  be  an  insur- 
ance broker,  and  no  person  shall  act  as  such  broker  except  as 
provided  in  section  9o." 

Acts  of  1907,  c.  576,  §  98. 


MASSACHUSETTS  STATUTE  LAW  OF  AGENCY  423 


Brokers^  Licenses 

The  insurance  commissioner  may: —  Broker's  Li- 

(a)      upon  payment  of  $10  issue  to  cense  Fee. 

(d)  suitable  person  resident  in  Massachusetts  or  resident 
in  any  other  state  granting  broker's  licenses  to  resi- 
dents   of  this  state,  a  license: — 

1.  to  negotiate  contracts  of  insurance, 

2.  or  reinsurance, 

3.  or  place  risks,  or 

4.  effect  insurance  with  any  qualified  domestic 
insurance  company  or  its  agent  or  with  the 
authorized  agent  in  this  Commonwealth  of 
any  foreign  insurance  company  duly  admitted 
on  the  following  conditions: — 

(1)  Written  application   filed   with    insurance  commissioner  Application, 
on  form  provided  by  him,  sworn   to  by  applicant  and  kept  on  file 

by  commissioner,  states 

(a)  name;  (d)  age;  (c)  residence  and  occupation  of  appli- 
cant at  time  of  making  application;  (</)  occupation 
for  five  years  next  preceding  date  of  application;  (e) 
that  the  applicant  intends  to  hold  himself  out  and 
carry  on  business  in  good  faith  as  an  insurance  broker; 
(y)  such  other  information  as  the  commissioner  may 
require. 

(2)  Application  shall   be  accompanied   by  a  statement  upon  Statement 

a  blank  furnished  by  the  insurance  commissioner  as  to  the  trust-  Accompany- 
worthiness  and  competency  of  the  applicant  signed  by  at  least  ii^g -^PP^ca- 
three  reputable  citizens  of  this  Commonwealth. 

If  the  commissioner  is  satisfied  that  the  applicant 

(a)      is  trustworthy  Qualifica- 

[d)      is  competent  '°"^' 

(c)  intends  to  hold    himself  out  and  carry  on   business    in 

good    faith  as  an  insurance   broker, 
he  shall    issue  to  him  the  license  applied  for,  License. 

(a)  which  shall  be  in  force  for  one  year  from  date  unless 
sooner  revoked  for  cause,  and 

(d)  commissioner   can   renew,  in   his   discretion,    without  Renewal, 
requiring  anew  the  details   required    in  the   original 
application,  on  payment  of  $10   fee  for  each  vear  for 
successive  \ear  or  \  ears. 


424 


LECTURES  ON  FIRE  INSURANCE 


Revocation.  The    commissioner    for    cause    shown    after   a    hearing   may 

determine : — 

(a)     that    licensee    has    not    complied   with    the    insurance 

laws, 
(d)     or  is  not  trustworthy,  or 

(c)  competent,  or 

(d)  is  not  holding   himself   out   and   actually  carrying  on 
business  as  an  insurance  broker,  or 

(e)  is  not  a  suitable  person  to  act  as  an  insurance  broker, 
and  thereupon  revoke  the  license  and  notif}  him  of  the  revocation. 

No  Fee  from  No   fee   is  required   of   a  soldier  or  sailor  who  served   in   the 

Veterans.        War  of  the  Rebellion  and  received  an  honorable  discharge,  if   he 

presents   to   the   insurance  commissioner   satisfactory  evidence   of 

his  identity. 

Insurance  in  Unattthorized  Companies 
Insurance  in  Insurance  commissioner  on  annual  payment  of  $20  may  issue 

Unauthorized  lit^enses  to  citizens  of  this  Commonwealth  permitting  person 
named  therein  to  procure  policies  of  fire  or  l)ombardment  insur- 
ance on  property  in  this  Commonwealth  in  foreign  insurance 
companies  not  authorized  to  transact  business  in  this  Common- 
wealth. 

Before  procuring  such  insurance  he  must  in  every  case  exe- 
cute and  file  within  five  days  thereafter  with  insurance  commis- 
sioner an  affidavit  which  shall  have  force  and  effect  for  one  year 
only  from  date  that  he  is  unable  to  procure  in  companies  duly 
admitted  amount  of  insurance  necessary  to  protect  said  property. 

(Usual  practice  is  to  send  postal  cards  to  companies  stating 
that,  if  the\-  do  not  reply  in  five  or  ten  days,  they  will  be  under- 
stood to  have  declined  the  risk.) 

He  shall  onlv  procure  insurance  under  such  license  after  he 
has  procured  insurance  in  companies  admitted  to  do  business  to  the 
full  amount  which  said  companies  are  willing  to  write  on  said 
property. 

He  need  not  file  affidavit  if  one  relative  to  same  property  has 
been  filed  within  the  preceding  twelve  months  by  any  broker  li- 
censed as  authorized  by  this  act,  nor  offer  any  part  of  such  insur- 
ance to  any  company  not  possessed  of  cash  assets  to  at  least 
$2.5,000,  nor  to  one  which  has  within  preceding  twelve  months 
been  in  an  im]:)aired  condition. 

Each  licensee  shall  keep  a  separate  account  of  the  business  done 


Companies. 
Licenses. 

Affidavit. 


MASSACHUSETTS  STATUTE  LAW  OF  AGENCY  425 


under  the  license,  a  certified  copy  of  which  accomit  he  shall  forth-    Separate 
with  tile  with  the  insurance  commissioner  ;    showing —  Accounts, 

(a)      exact  amount  of  such  insurance  placed  for  any  person, 

firm  or  corporation, 
{b)      gross  premium  charged  thereon, 
(c)      the  companies  in  which  placed, 
(^d)      date  of  the  policies  and  term  thereof,  antl  also  a  report 

in  detail  of 
((?)      all  such  policies  cancelled,  and 
if)    gross  return  premiums  thereon. 
Before  receiving  such  license  he  shall  execute  and  deliver  to   Bond, 
State  Treasurer  a  bond  of  ^2000,  with  sureties  approved  by  State 
Treasurer,  conditioned  that — 

(a)      licensee  will  faithfully  comply  with  all  requirements  of 

this  section. 
{b)    will  annually  file  with  the  State  7 reastircr  \n  January 
a  sworn  statement  of 

(1)  gross  premiums  charged  for  insurance  procured 
or  placed,  and 

(2)  gross  return  premiimis  on  such  insurance  can- 
celled under  such  license  during  year  ending 
31  Decemlier  last  preceding,  and 

(3)  will  pay  into  the  treasury  of  the  Common- 
wealth an  amount  equal  to  four  per  cent  of 
such  gross  premiums,  less  such  return  pre- 
miums so  reported. 

Acts  of  1907,  c.  576,  §  88. 
This  section  applies  to  reinsurance  of  Alassachusetts  property,    Applies  to 
though   the   contract    is    made    and    to    be    performed    outside    this    Reinsurance 
Commonwealth.  of  Mass. 

1  Opinions  of  Attorney  General  42.  Property. 

"  An  insurance  agent  shall  be  personally  liable  on  all  contracts  Personal 

of  insurance  unlawfullv  made  by  or  through   him   directly  or  in-  Liability  for 

directly,  for  or  in  behalf  of  any  company  not  authorized  to  do  busi-  Unlawful 

ness  in  this  Commonwealth.  Insurance. 
Acts  of  1907,  c.  576,  §  97. 

"  A  person  licensed   under  the  pro\  isions  of  section  88,  who   Penalties  for 

procures  or  acts  in  any  manner  in  the  procurement  or  negotiation   Failure 

of  insurance  in  any  unauthorized  foreign  company-,  and  °,  /  ^ 

(a)      who  neglects  to  make  and  file  the  affida\  it  and  state-        r     c-  i 
^    ^  "  or  tor  raise 

ments  required  by  said  section,  or  Affidavit. 


426 


LECTURES   ON  FIRE  INSURANCE 


Penalties  for 
Acting  as 
Agent  or 
Broker  wiih- 
out  a  License, 
or  in  Negoti- 
ation of  Un- 
lawful Insur- 
ance, or  in 
Violation  of 
Insurance 
Act. 

Applies 
where  Prop- 
erty outside 
of  State. 


Informer  in 
Certain  Cases 
Gets  Half  of 
Fine  Imposed. 


Premiums 
held  in  Trust 
for  Com- 
panies. 


Failure  to 
Pay  Over 
Premiums. 


Penalty. 


((5)  whi)  willfully  makes  a  false  aitidax  it  or  statement,  shall 
forfeit  his  license  and  l^ie  punished  by  a  fine  of  not 
less  tlian  $100  nor  more  than  $500,  or  by  imprisonment 
for  not  more  than  one  year,  or  by  lioth  such  tine  and 
imprisonment. 

Acts  of  1907,  c.  :")76,  §  lOS. 
"A  person  who  assumes  to  act  as  an  insurance  agent,  or 
broker  without  a  license ;  or  who  acts  in  any  manner  in  the  negoti- 
ation, or  transaction  of  unlawful  insurance  with  a  foreign  insurance 
company  not  admitted  to  do  business  in  this  Commonwealth,  or 
who  as  principal  or  agent  violates  any  provision  of  this  act  relative 
to  the  negotiation  or  effecting  of  contracts  of  insurance,  shall  be 
punished  for  each  offense  by  a  fine  of  not  less  than  $100,  nor  more 
than  $500. 

Acts  of  1907,  c.  576,  i^  107. 
The  statute  imposing  a  penalty  on  a  person  assuming  to  act  as 
an  insurance  agent  without  license  therefor  as  provided  bv  law,  ap- 
plies to  cases  in  which   insurance  is  effected  on  property  which  is 
not  within  the  Commonwealth. 

Commonwealth  v.  Roswell  ;    173  Mass.  119. 

"  The  person,  if  other  than  the  insurance  commissioner  or  his 
deputy,  upon  whose  complaint  a  conviction  is  had  for  violation  of 
the  law  prohibiting  insurance  in  or  by  foreign  companies  not  au- 
thorized to  do  business  in  this  Commonwealth,  shall  be  entitled  to 
one-half  of  the  fine  recovered  upon  sentence  therefor." 
Acts  of  1907,  c.  576,  §  106. 

"  An  insurance  agent  or  broker  who  acts  in  negotiating  or 
renewing  or  continuing  a  contract  of  insurance  bv  an  insurance 
company  lawfully  doing  business  in  this  Commonwealth,  and  who 
receives  any  money  or  substitute  for  money  as  a  premium  for  such 
a  contract  from  the  insured,  shall  be  deemed  to  hold  such  premium 
in  trust  for  the  companv  making  the  contract. 

"  If  he  fails  to  pay  the  same  over  to  the  company  after  written 
demand  made  upon  him  therefor,  less  his  commission,  and  anv  de- 
ductions to  which  by  the  written  consent  of  the  company  he  mav  be 
entitled,  such  failure  shall  be  prima  facie  evidence  that  he  has  used 
or  applied  the  said  premium  for  a  purpose  other  than  paying  the 
same  o\  er  to  the  company,  and  upon  conviction  thereof  he  shall  be 
deemed  guilty  of  larceny  and  punished  accordingly." 
Acts  of  1907.  c.  576,  ^  121. 

If  \alue  of  the  property  stolen  exceeds  $100,  the  penaltv  is 
imprisonment  in  State  Prison  not  o\  er  five  years,  or  fine  not  more 
tlian  $600  and  imprisonment  in  jail  not  o\  cr  two   \ears.      If   under 


MASSACHUSETTS  STATUTE  LAW  OF  AGENCY  427 


$100,   then  imprisonment   in   jail    not   over    one   \ear  or  fine   not 
over  $300. 

Revised  Laws,  c.  20S,  §  26. 

If  the  agent  fails,  owing  the  companv  for  premiiuns  collected  Lien  on  As- 

and  held  by  him,   and  with  assets   including  such  premiums,  the  sets  of  Agent 

companv  is  entitled  to  be  paid  in  full  for  such  premiums,  whether    °^    ''^" 
111  1  -I'll  -1       miums. 

they  have   l^een  kept  separate  or  mixed  with  other  monevs  in  the 

pt)Ssession  of  the  agent ;   and  the  trustee  in  bankruptcv  of  the  agent 

if  the  funds  are  so  inixed  would  take  his  assets  subject  to  such  lien 

of  the  company. 

Loveland  on  Bankruptcy,  3d  ed.  pp.  500-502. 

The  beneficial  owner,   as  against  the  trustee  in  bankruptcy,  is  Following 
entitled  to  such  propertv  if  it  can  be  identified,  or  the  trust  property  Trust  Funds* 
can  be  traced  and  followed  into  other  property  into  which  it  has  been 
converted. 

Loveland  on  Bankruptcy,  3d  ed.  p.  50L 

For  this  purpose  "  There  is  no  difference  between  investments 
in  the  purchase  of  lands,  or  chattels,  or  bonds,  or  loans,  or  moneys 
deposited  in  a  bank  account." 

Central  Nat.  Bank  v.  Connecticut  IvLitual  Life  Ins.  Co.  ;  104 
U.  S.  54,  68. 

But  where  he  cannot  trace  the  trust  propertv  or  fund,   in  its  Where  Trust 
original  or  some  substituted  form,  in  the  estate  which  comes  into  Funds 

the  hands  of  the  trustee,  he  is  not  entitled  to  anv  priority  over  the  ^^""o* 

1  T  -11  1      •         .-11  1   "        J  J  be  Traced, 

general  creditors  with  whom  he  is  entitled  to  share /re?  rata. 

Lo^■eland  on  Bankruptcy,  3d  ed.  p.  502. 

"  If  by  the  laws  of  any  other  state  any  taxes,  fines,   penalties.  Reciprocal 
licenses,  fees,   deposits  or  other  obligations  or  prohibitions,   addi-  imposition  of 
tional  to  or  in  excess  of  those  imposed  by  the  laws  of  this  Common-  pj^es  Fees 
wealth    upon    foreign  insurance    companies  and   their  agents,  are  ^^^ 
imposed  on  insurance  companies  of  this  Commonwealth  and  their 
agents  doing  business  in  such  state,  like  obligations  and  prohibitions 
shall  be  imposed  upon  all   insurance  companies  of  such  state  and 
their  agents  doing  business  in  this  Commonwealth  so  long  as  such 
laws  remain  in  force." 

Acts  of  1907,  c.  576,  §  90. 

Annual  Returns  to  Tax  Commissioner 

Every  agoit  of  foreign   insurance  company  shall   annually  on  Annual  Re- 
or  before  Oct.  15th   make  return  to  the  Tax   Commissioner  of  all  turns  to  Tax 
business  transacted  by  him  as  such  agent  during  the  year  ending  Commis- 
with  the  30th  day  of  September  last  preceding,   in  such  form  as 
Tax  Commissioner  prescribes. 


428 


LECTURES  ON  FIRE  INSURANCE 


Agency 
Papers  and 
Accounts 
Open  to  Ex- 
amination. 

Neglect  or 
Refusal  to 
Make  Re- 
turns or  Show 
Books,  etc. 


False  State- 
ments. 


All  hook>,  papers,  and  accounts  of  his  a<^encv  shall  be  open  to 
the  inspection  of  the  Tax  Commissioner  at  anv  time  to  enable  him 
to  verify  the  statements  and  transactions  aforesaid. 
If  agent — 

(a)      ne<;lects  or  refuses  to  make  such  return,  or 
(/))      refuses  to  submit  books,   papers  and  accounts  of  his 
agency  to   such  inspection,   tax  commissioner  reports 
to  the  insurance  commissioner  who  cancels  the  agent's 
license  and  makes  publication  thereof. 
License  so    cancelled    shall   not  be  renewed  within  one  year 
Limitation,     thereafter ;   but  only  such  agents  shall  be  subject  to  this  provision 
as  are  not  recjuired  to  make  said  returns  to  any  other  agent  in  this 
Commonwealth  for  j^remiums  received. 

Acts  of  1907,  c.  576,  §  93, 
For  willfully  making  a  false  annual  or  other  statement  required 
by  law  the  company  and  the  persons  making  oath  to  or  subscribing 
the  same  shall  be  severally  punished  by  a  fine  of  not  less  than  $500, 
nor  more  than  $5000. 

A    person    who   makes  oath  to  such  false  statement  shall  be 
guilty  of  perjury. 

Acts  of  1907,  c.  576,  §  110. 
Punishment  imprisonment  not  more  than  20  years  or  fine  not 
more  than  $1000,   or  imprisonment  in  jail  not  o\er  three  years  or 
both  such  fine  and  imprisonment. 

Acts  of  1911,  c.  184.  also  provides  that  anv  person — 

(a)      making    false    report  to  the    insurance  commissioner 

etc.  (or  other  commissioners),  or 
(d)  testifying  or  affirming  falsely  to  any  material  fact  in 
anv  matter  wherein  an  oath  or  affirmation  is  required  or 
authorizetl,  or 
(c)  making  any  false  entry  upon  any  book,  report,  paper 
or  statement  of  any  company  making  report  to  any  of 
said  commissioners  or  commissioner,  or  to  any  agent 
appointed  to  examine  the  affairs  of  an}'  such  company  ; 
or  to  deceive  the  stockholders  or  any  officer  of  any 
such  company  ;  or  to  injure  or  defraud  any  such  com- 
pany, and  any  person  who  with  like  intent  aids  or 
abets  another  in  any  violation  of  this  act  shall  he 
punished  by  fine  not  more  than  $1000.  or  b\-  imprison- 
ment not  more  than  one  year,  or  by  both  such  fine  and 
imprisonment. 


Penalty. 


False  Reports 
to  any  Com- 
missioner. 

Perjury. 


False  Entries. 


Penalty. 


MASSACHUSETTS  STATUTE  LAW  OF  AGENCY  429 

Every    insurance    company   must    file  on  or  before   |an,  liMh  Annual  Re- 

with  insurance  commissioner  a  statement  of  its  financial  condition  PO""'  o^ 

on  preceding  Dec.  31st.      For  cause  commissioner  can  extend  time  ^°"»it*o"* 
not  later  than  March  1st. 

Acts  of  1907,  c.  576,  §  101. 

If  it  neglects  to  make  and  Hie  such  report  in  time,  it  shall  for-  Penalty, 

feit  $100   per  day  during  time   neglect  continues,  and  upon  notice  ^^vocation 

1       •  •     •  -^  ^1       •..     .       1  1       •  1     11   of  Authority. 

by  insurance  ct)mmissioner  its  authority  to  do  new  business  shall 

cease  while  such  default  continues. 

Acts  of  1907,  c.  576,  §  110. 

Failure  to  file  the  annual  statement  at  the  proper  time  may 

not  render  void  a  subsequent  contract;   especially  if  the  statement 

is  ultimateh"  hied. 

Atlantic  Mutual  Fire  Ins.  Co.  v.  Concklin ;   6  Gray  73. 

"The  annual  statement  of  a  company  of  a  foreign  country  shall   Foreign 
embrace  only  its  business  and  condition  in  the  United  States,  and   Companies, 
shall  be  subscribed  and  sworn  to  by  its  resident  manager  or  princi- 
pal representati\e  in  charge  of  its  American  business." 
Acts  of  1907,  c.  576,  §101. 

[Chap.   162.     Acts  of  1912.] 
An    Act    rei.ative    to  the    annual   returns    of    insurance 

companies. 
jBc  it  enacted^  etc.^  as  follows : 

Section  1.  Every  fire  insurance  company  doing  business  in  this 
commonwealth  shall  include  in  its  annual  statement  required  to  be 
filed  by  section  one  hundred  and  one  of  chapter  five  hundred  and 
seventy-six  of  the  acts  of  the  year  nineteen  hundred  and  seven,  a  list 
of  all  claims  under  policies  issued  by  it  to  persons  in  this  common- 
wealth which,  during  the  year  covered  by  the  statement,  have  been 
made  the  subject  of  suits  in  the  courts  and  also  of  those  which  at  the 
time  of  making  the  statement  are  in  suit.  These  returns  shall  be  in 
such  detail  as  the  insurance  commissioner  shall  prescribe. 

Section  2.  If  upon  examination  of  said  returns,  or  upon  com- 
plaint, the  commissioner,  after  investigation  and  a  hearing,  is  of  the 
opinion  that  a  fire  insurance  company  is  unreasonably  and  unfairly 
delaying  the  settlement  of  claims  or  is  unduly  engaging  in  litigation, 
he  shall  make  a  special  report  of  his  findings  thereon  to  the  legisla- 
ture at  its  next  session. 

Section  3.  This  act  shall  take  effect  upon  its  passage.  S^-Ap- 
proved  February  2Jf^  1912."^ 

The  insurance  commissioner  may,  whenever  he  determines  it   -c 
to  be  prudent  for  the  protection  of  policy  holders  in  this  Common-   tionsby 
wealth,  visit  and  examine,  personally  or  by  proxy,  any  foreign  in-   Com- 
surance   company   seeking  admission,   or    already   admitted    to    do   missioner. 


430  LECTURES  ON  FIRE  INSURANCE 

Imsiness  here,  and  shall  have  free  access  to  all  its  books  and  papers 
and  those  kept  bv  any  of  its  agents. 
Testimony.  He  can  sinnmt)n  and  administer  oath  to  and  examine  as  Avit- 

nesses  its  directors,  officers,  agents  or  trustees,  and  any  other  per- 
sons, relative  to  its  affairs,  transactions  and  conditions. 
Acts  of  1907,  c.  576,  §  6. 
Penalty  for  Whoever,  without    justifiable  cause,   neglects  upon    due  sum- 

Failure  to  mons  to  appear  and  testify  under  section  6  before  the  commissioner 
Appear  and  or  obstructs  him,  his  deputy  or  examiner  in  their  examination  of  an 
lestity.  insurance  company,  is  liable  to  a  fine  of  not  more  than  $10U0,  or 

imprisonment  for  not  more  than  one  year. 

Acts  of  1907,  c.  576,  §  117. 

Procedure  for  If  the  commissioner  is  of  the  opinion  that  a  foreign  insurance 

Revoking 

.     ,     .  ^    ^  company — 
Authority  of  ^      "^  .     . 

P      .      ^  ((7)      IS  in  an  unsound  condition, 

(d)      has  failed  to  comply  with  law,  or, 

(c)  provisions  of  its  charter,  or 

(d)  condition  such  as  to  make  its  proceedings  hazardous  to 
public  or  its  policy  holders. 

(e)  or  its  officers,  or 

( 1 )      Agents  refuse  to  submit  to  examination,  or  to 
perform  any  legal  obligation  relative  thereto. 

He  shall 

(a)      Revoke  or  suspend  all  certificates  of  authority  granted 
to — 

(1)  said  foreign  insurance  company, 

(2)  its  officers,  or 

(3)  agents, 

(/>)      cause  notice  thereof  to  be  published  in  the  newspaper 
in  which  the  general  laws  are  published  and  no  ^/czc 
biisit7ess  shall  thereafter  be  done  by 
(a)      it,  or 
{b)      its  ag-cjtts. 
while  such  default  continues,  nor  until  its  authority  to  do  business 
is  restored  bv  the  commissioner. 
Annual  Re-  Fire  insurance  companies  are  obliged  annually,  and  at   such 

turns  of  Re-    ,,ther  times  as  the  insurance  commissioner  requires,  to  make  sworn 
insurance.        ,-,^.tui-n.s  to  him  of  all  re- ifisurancc  contracted  for,  or  effected  by  it, 
directly  or  indirectly,  on  property  in  this  Commonwealtlu 

If  it  neglects  or  refuses  to  make  such  returns,  the  commissioner 


MASSACHUSETTS  STATUTE  LAW  OF  AGENCY  431 


may  i"e\'oke  its  authority  (if  a  foreign  company)  or  report  the  facts 
to  the  attorney-general  (if  a  domestic  company). 
Acts  of  1907,  c.  576,  §  20. 
For  violation  of  this  section  the  company,  and  the  agent  effect-   Penalty, 
ing  or  acting   in    negotiation    of  such  re-insurance  shall  severally  be 
punished  bv  a  fine  of  $50t). 

Acts  of  li)07,  c.  o7(i,  >?  111. 
A  foreign  insurance  company  doing  business  in  this  Common- 
wealth is  not  required,  in  case  it  desires  to  reinsure  a  risk,  to  take 
out  its  policy  of  insurance  by  and  through  an  agent  resident  in  this 
Commonwealth. 

2  Opinions  of  Atty.  Gen.  123. 

E\idence  that  a  foreign  insurance  companv,  admitted  to  do 
business  in  this  Commonwealth,  has  reinsured  in  a  company  not  so 
authorized  and  without  tiling  the  alfidavit  required  by  section  88, 
justifies  the  commissioner  in  revoking  the  authority  of  the  company, 
and  it  is  immaterial  that  the  contract  of  reinsurance  was  made  and 
to  be  performed  outside  the  state. 

Opinions  of  Atty.  Gen.  42.    (1904.) 

"  ^Yhoever  violates  any  pro^'ision  of  this  act   (1907,   c.   576)    Penalty  for 

the  penalty  whereof  is  not  specifically  provided  for  herein,  shall  be   Violation  of 

punished  by  a  fine  of  not  more  than  $500."  ^f*  "°*  ^P^' 

cifically 
Acts  of  1907,  c.  576,  §  120.  Covered. 


QUESTIONS, 

1.  In  case  of  conflict  between  common  and  statute  law,  which 
governs  ? 

2.  What   information  is  required  bv  the    Insurance  Commis- 
sioner for  the  issuance  of  agency  license? 

3.  May  a  corporation  be  licensed  as  an  Agent? 

4.  What    important  requirements  apply  to  advertisements  of 
companies  represented  by  an  agent  ? 

5.  Qiiote  the  substance  of  statute  requirements  as  to  over-in- 
surance? 

6.  Define  a  broker  and  state  conditions  under  which  a  broker 
may  do  business  in  Massachusetts? 

7.  State  briefly  the  statute  provisions  relating  to  insurance  in 
imauthorized  companies  ? 


432  LECTURES  ON   FIRE  INSURANCE 

8.  What  are  the  provisions  relating  to  an  a^^ent  or  broker  who 
receives  money  for  premiums? 

9.  What  are  the  requirements  as  to  returns  for  taxation? 


BIBLIOGRAPHY 

Crawford,  William  S.  :  Pointers  for  local  agents.   255  pp.  Chicago, 

190S.      Western  Underwriter  Co. 
Hine  C.  C.  and  Nichols,  Walter:      Fire  Agents'  law  book,  95  pp. 

New  York,  1887.     Insurance  Monitor  Co. 
Richards,  George  :    A  treatise  on  the  law  of  insurance.    959  pp. 

New  York,  1911.     Banks  Law  Pub.  Co. 
Wolff,  Louis  H.  :  Wolff's  Law  of  Agency.     oo2  pp.  Indianapolis, 

1904.      Rough  Notes  Co. 


V 

LOCAL  AGENCY  OFFICE  SYSTEMS  AND  ACCOUNTS 

Necessity  for  System 

There  is  probably  no  business  or  profession  in  the  world 
which  requires  more  accuracy  in  handling  or  more  careful  atten- 
tion to  details  than  the  Fire  Insurance  business,  where  an  over- 
sight or  error  may  cost  either  the  company  or  the  assured  thousands 
of  dollars,  and  cause  annoyance,  trouble  and  embarrassment  that 
can  never  be  remedied.  The  overlooking  of  an  expiration  or  the 
binding  of  a  company  for  an  amount  in  excess  of  its  authorization 
may  lose  to  the  agent  either  a  valuable  client  or  a  very  desirable 
company  connection,  to  say  nothing  of  his  loss  of  reputation  as 
an  underwriter  and  a  business  man. 

One  of  the  most  important  things  in  the  conduct  of  a  local 
agency  office  is  "Systein, "  without  which  it  is  absolutely  impos- 
sible to  carry  on  the  business  of  to-day  with  any  satisfaction 
either  to  the  customer  or  to  the  agent  himself.  With  a  well 
ordered,  up-to-date  system  the  actual  woik  of  an  agency  can  be 
reduced  at  least  one  half,  and  a  large  volume  of  business  can  be 
handled  accurately,  promptly  and  with  surprising  ease,  consider- 
ing the  detail  that  is  necessary  even  under  the  most  favorable  con- 
ditions. 

When  we  compare   the    present    office   systems  with    those  of   Office  Sys- 

twenty  years   ago   the    difference    is    surprising;   and    we   wonder   temsPast 

how  we  were  able  to  handle  the  business  at  all  under  such  adverse   _, 

"resent, 
conditions.      The  change  has   been  one  of   gradual   evolution  and 

one  that  has  taken  years  of  study  and  experiment  to  perfect. 
Twenty  years  ago  it  was  the  custom  to  use  policy  registers  fur- 
nished by  the  companies,  each  company  having  its  own  register, 
so  that  when  an  agent  represented  fifteen  different  companies 
there  were  fifteen  such  books  to  handle  every  day  and  to  put  away 
for  safekeeping  each  night.  These  books  varied  in  size.  Many 
of  them  were  large  and  cumbersome  to  handle,  and  were  the 
property  of  the  companies  who  furnished  them.  As  a  result, 
when  the  agency  of  a  company  was  transferred,  either  by  action 
of  the  company  or  on  account  of  the  resignation  of  the  agent  him- 


434  LECTURES  ON  FIRE  INSURANCE 

self,  it  was  customary  for  the  company  to  claim  its  property  and 
insist  that  the  agent  give  up  the  register,  which  contained  the 
only  complete  record  of  the  business  of  that  company  which  he 
had  in  the  office,  so  that  it  might  be  turned  over  to  the  new  agent 
for  his  information  and  further  use.  Under  such  conditions  the 
agent  was  obliged  to  "get  busy"  and  have  copies  of  all  the  forms 
and  other  records  in  the  book  made  in  order  to  have  an  abstract 
of  his  own  business. 
Company  Another   disadvantage   of   the    company   register   system   was 

Register  ^j-jj^j-  vvhere  a  large  line  was  divided  among  a  dozen  or  more  com- 

ys  em.  panics  it  was  necessary  to  have  a  copy  of  the  form  for  each  book, 

or,  in  other  words,  a  dozen  copies.  Where  printed  forms  were 
used  this  was  not  so  bad,  but  where  typewritten  forms  were 
necessary  it  made  considerable  additional  labor,  and  in  the  old 
days  before  typewriting  machines  had  come  into  general  use  and 
the  clerks  were  obliged  to  write  out  each  form  with  pen  and  ink, 
it  meant  a  day's  work  to  complete  the  record  of  one  large  risk. 
General  Reg-  The    first    improvement    over    this  very   objectionable  system 

ister  and  vvas  the  General    Register  and    Form   Book,  which    were  separate 

orm  Doo  .  volumes  of  great  weight  and  imposing  appearance.  They  were, 
in  fact,  so  heavy  and  unwieldy  that  no  lady  clerk  could  carry  them 
unless  she  took  a  physical  culture  course  out  of  business  hours. 
However,  they  were  such  time  savers  that  they  were  at  first 
regarded  by  local  agents  with  great  approval,  and  many  agencies 
adopted  them  as  being  an  advanced  system.  This  method  sim- 
plified the  work  greatly,  because  only  one  form  was  necessary,  no 
matter  how  many  companies  were  interested  on  the  risk.  The 
form  was  numbered  and  the  various  companies  were  noted  by 
number  or  name,  with  policy  number  and  amount  on  margin  of 
the  form  book  opposite  the  form. 

The  General  Register  contained  simply  a  one  line  abstract  of 
the  risk,  referring  by  number  to  the  form  upon  the  form  book. 
These  books,  containing  as  they  did  the  records  for  all  companies 
of  the  agency,  were  the  property  of  the  agent  who  purchased  them 
with  his  own  money  and  could  not  be  taken  by  a  companv  trans- 
ferring to  another  agencv,  which  was  another  distinct  advantage 
in  their  use.  These  clumsy  and  unsatisfactory  books  gave  way 
in  their  turn  to  the  Duplicate  Daily  Report  and  Card  System  now 
in  use,  and  which  in  various  forms  has  been  adopted  generally  by 
practically  all  agencies  of  any  size  throughout  the  countr_\-. 


LOCAL  AGENCY  OFFICE  SYSTEMS  435 


Recordingf  Systems 

The    Duplicate    Daily   Report    is  of    course  an  exact    copy  of   Daily 
the  report  sent   to  the  company,  which    in    its   turn    is  a  duplicate   l^cport 
of    the    policy    itself,    so    far    as    policy    number,    amount,    rate,      ^ 
premium,  date  of  issue  and  of  expiration,  term  and  form  of  policy 
are  concerned.      These   duplicate   daily  reports  are   the  same  size 
as   the  originals   furnished   by   the  companies,  and  are  made  of   a     • 
good  quality  of  fairly  thick  paper,  so  that   they  may  be  placed  on 
file  in  a  vertical  position  in  a  cabinet  without  becoming  wrinkled 
or   losing   their   shape.      The  paper    is  usually   tinted    instead    of 
white,  so  that   they  will  not  soil  easily    in  much    handling.      The 
only  printing  upon    them    is   the  name  of   the  company  at  the  top 
and   a  notation  at   the   lower   left-hand   corner   to   the   effect   that 
they  are  the  property  of  the  agent. 

When  the  original  daily  report  is  struck  off  upon  the  type- 
writing machine  for  the  company  the  duplicate  is  made  at  the 
same  time  by  in<;erting  a  sheet  of  carbon  paper  between  the  two, 
thus  preparing  both  at  one  operation,  with  the  exception  of  the 
forms  which  are  manifolded  under  a  separate  operation  and 
attached  afterwards.  Although  new  originals  have  to  be  made 
for  the  companies  each  year  the  duplicate  can  be  used  for  several 
years  in  succession  by  merely  changing  the  policy  number  and 
dates  of  commencement  and  expiration  upon  the  blank,  which  is 
a  great  saving  in  the  matter  of  expense  and  filing  space. 
These  duplicate  dailies  are  filed  in  numerical  order  according  to 
policy  number  so  that  they  can  be  easily  referred  to,  and  are 
divided  by  months.  When  a  policy  is  canceled  the  report  is 
removed  from  the  regular  filing  case  and  placed  in  its  numerical 
position  in  another  case  or  receptacle  known  as  the  "dead  file," 
where  it  can  be  found  without  difficulty  whenever  reference  to  it 
is  necessarv. 

In  addition  to  the  duplicate  daily  report  a  Card  System  is 
used,  which,  as  a  rule,  comprises  five  features,  viz.,  street  loca- 
tion, expiration,  index,  ledger  accounts  and  company  monthly 
abstracts.  Entries  upon  these  cards  are  made  from  the  duplicate 
daily  report,  so  that  the  original  report  may  be  stamped  by  the 
stamp  clerk,  and  forwarded  to  the  company  without  delay. 

The  Street  Location  card    is  a  record   of   great    convenience,    Street  Loca- 
and    is  so  ruled    as   to  give  space    for   location,  name  of   assured,    tion  Card, 
policy   number,  amount,  rate,  expiration,  name   of   company   and 


436 


LECTURES  ON  FIRE  INSURANCE 


class  of  risk.  They  are  filed  in  a  cabinet  according-  to  the  loca- 
tion which  appears  on  tlie  top  line,  the  names  of  streets  being 
placed  in  alphabetical  order,  and  according  to  street  number, 
the  odd  numbers  being  divided  from  the  even  numbers  by  a 
guide  card,  so  that  all  risks  on  one  side  of  a  street  are  together, 
and  separated  from  those  on  the  other  side  of  the  street.  As  all 
lines  written  by  the  agency  on  each  risk  at  the  given  location  are 
entered  on  these  cards,  it  is  possible  to  tell  at  a  glance  how  much 
insurance  the  agent  has  upon  the  risk,  and  when  the  policies 
expire.  The  agent  can  also  instantly  answer  any  question  of  the 
assured  as  to  any  of  the  facts  shown  upon  the  card  without  refer- 
ring to  any  other  records,  and  pl'actically  all  the  information 
lacking  is  the  matter  of  form,  which  can  be  found  in  another 
minute  by  referring  to  the  daily  report  from  the  policy  number 
shown  upon  the  card. 


J.    LOCATION    CARD 


Location 


Assured 


Policy  No. 

Company 

Amount 

Rate 

Expiration 

Remarks 

Month 

Day 

Year 

All  lines  on  or  in  the  same  building  are  noted  upon  the 
company  daily  report  from  this  card,  so  that  any  entry  upon  the 
maps  is  unnecessary  unless  the  company  also  requires  information 
as  to  "block  lines." 

There  are  several  kinds  of  Expiration  Cards,  one  of  the  best 


LOCAL  AGENCY  OFFICE  SYSTEMS 


437 


being  a  combination  of  expiration  and  index,  which  accomplishes  Expiration 
two  purposes  in  one  set  of  cards.  These  cards  are  the  same  size  Cards, 
as  the  location  cards  already  described,  although  they  are  usually 
a  different  color  so  as  to  be  easily  distinguished  from  the  others, 
the  location  cards  being  white  and  the  expiration  cards  being 
buff  or  some  other  light  tint.  Expiration  cards  are  ruled  some- 
what differently  than  the  location  cards,  but  contain  practically 
the  same  information,  with  name  of  assured  at  the  top.  They  are 
so  cut  that  a  small  projection  or  tab  at  the  top  contains  a  notation 
as  to  month  of  the  year. 


2.    EXPIRATION  AND  INDEX  COMBINED 
Ap 


EXPIRES 

Name  of  Assured 

Month 

Day 

Year 

Location 

Policy  No. 

Company 

Amount 

Property 

Premium 

- 

Rate 

Term 

Register 

Broker 

Form 

To  secure  the  advantage  of  the  index  feature  they  are  filed 
according  to  name  of  assured  in  alphabetical  order,  so  that  all 
cards  for  each  assured  come  together  in  the  cabinet,  and  can  be 
referred  to  in  a  moment  at  any  time.  Before  the  end  of  each 
month  the  cards  of  expiration  for  the  coming  month  are  taken  out, 
arranged  according  to  dates,  and  placed  together  in  another  section 
of  the  cabinet,  from  whence  they  are  taken  day  by  day  as  the  poli- 
cies are  renewed.  The  work  of  taking  these  cards  from  the  gen- 
eral cabinet  is  greatly  facilitated  by  the  tabs  at  the  top  which  I 
have  already  mentioned,  the  only  point  being  to  make  sure  after 
locating  the  card  for  that  month  that  it  comes  due  in  the  current 
year.  There  being  many  term  policies  written,  this  takes  con- 
siderable time  and  care,  but  as  it  has  to  be  done  but  once  a  month, 
and  then  at  a  time  when  other  work  of  the  office  is  not  pressing, 
there  is  no  particular  objection  to  it  on  that  account. 


438  LECTURES  ON  FIRE  INSURANCE 

Filing  Some   offices   file   their   expiration    cards    without   regard   to 

Methods.  index  of  name,  placing  them  according  to  month  and  year,  which 
of  course  avoids  the  necessity  of  going  through  the  whole  cabinet 
and  picking  them  out  each  month.  In  such  cases  a  separate  system 
of  indexing  has  to  be  kept,  so  that  each  method  has  its  advantage 
over  the  other,  and  it  becomes  simply  a  matter  of  choice. 

Accountingf  Systems 

Ledger  Card.  The   Ledger  Card    is  considerably  larger   than   those  already 

described,  it  being  ruled  with  debit  and  credit  columns,  with 
sufficient  space  for  several  entries.  These  ledger  cards  have  a 
distinct  advantage  over  books  of  any  description,  even  the  loose- 
leaf  ledger  folio,  as  they  are  light,  easily  handled,  and  take  up 
very  little  space.  When  an  account  is  paid  they  are  immediately 
taken  from  the  cabinet,  jDosted  from  the  cash  book,  and  jDut  away 
in  the  "dead"  file  for  future  reference,  being  placed  in  alpha- 
betical order,  with  name  of  the  customer,  broker,  or  company,  as 
the  case  may  be,  at  the  top.  By  following  this  plan  only  live  or 
open  accounts  are  in  the  working  cabinet  for  ready  reference. 
These  cards  can  be  used  again  and  again  so  long  as  there  is  any 
blank  space  left  upon  them,  which  is  a  considerable  saving  not 
only  of  labor  but  of  expense  as  well,  as  they  are  much  more 
costly  than  the  smaller  ones  used  for  location  and  expiration  pur- 
poses. 
Monthly  Ab-  The  only  other  card  necessary   to  the  system  I  am  describing 

stract  Card,  is  the  Company  Monthly  Abstract  Card,  which  is  larger  than  any 
of  those  previously  mentioned,  being  the  size  of  an  ordinary 
account  current.  These  cards  when  completed  contain  all  the 
information  appearing  on  the  monthly  account  rendered  to  the 
company  as  to  business  written  for  the  month,  except  the  cancela- 
tions, reinsurance,  rebates,  charges,  commission,  and  balance 
due,  these  figures  appearing  of  course  upon  the  ledger  card. 
These  duplicate  account  cards  are  also  placed  in  the  vertical  file, 
being  arranged  according  to  years  and  months,  and  are  very  val- 
uable to  the  agent  as  a  source  of  reference. 

Collections  and  Remittances 

Importance  The  matter  of   collections  is  an  important  feature  in  the  con- 

of  Collections.  (i,^jct   of   a   local    agency,  and   one  which    requires  systematic  and 

careful    handling   in  order   to  secure  satisfactory    results,  and   yet 

not  antagonize  the  assured. 


LOCAL  AGENCY  OFFICE  SYSTEMS  439 


In  the  matter  of  payment  of  insurance  premiums  the  public 
may  be  divided  into  five  classes:  those  who  pay  cash  immediately 
upon  delivery  of  the  policy;  those  who  remit  promptly  at  the  end 
of  the  month  in  which  the  policy  takes  effect;  those  who  mail 
check  upon  receipt  of  second  bill;  those  who  never  mail  checks, 
but  cheerfully  draw  same  whenever  request  is  made  upon  them 
by  the  agent  in  person;  and  those  who  never  pay  until  forced  to 
do  so  under  threat  of  cancelation  of  the  policy.  An  agent  who 
looks  after  his  collections  closely  soon  discovers  in  which  of  these 
classes  the  customer  belongs,  and  governs  himself  accordingly. 

A  valuable  assistance  in  the  collection  of  premiums,  and  a  Collection 
method  which  has  worked  out  very  well  in  many  agencies,  is  the  Methods, 
practice  of  enclosing  bill  with  each  policy  upon  delivery,  in 
which  case  the  assured  usually  either  draws  check  for  the  account  on 
the  spot,  or  places  the  policy  in  a  safe  deposit  box  and  puts  the  bill 
in  a  pigeon  hole  of  his  desk  to  be  paid  with  others  when  drawing 
checks  for  his  bills  of  the  month. 

Another  plan  which  has  proved  of  great  assistance  in  the  col- 
lection of  premiums  is  the  sending  out  of  notices  about  ten  days 
in  advance  of  expiration  on  all  policies  of  small  amount,  usually 
household  furniture  risks  where  the  premiums  range  in  sums  of 
anywhere  from  $'2  to  $7  or  $8.  These  notices  are  printed  upon 
slips  of  proper  size  for  mailing  in  small  ordinary  envelopes, 
blank  spaces  being  left  to  fill  in  on  typewriting  machine,  covering 
name  and  address  of  assured,  policy  number,  company,  amount, 
class,  term  of  policy,  expiration,  and  amount  of  premium. 

In  response  to  these  notices  about  eighty  per  cent  of  assured 
either  call  at  the  office,  order  renewal  and  pay  cash  in  advance, 
or  reply  that  they  do  not  care  to  have  the  insurance  continued, 
there  being  very  few  of  the  latter  class.  The  day  the  policies 
expire  letters  are  sent  to  the  other  twenty  per  cent  who  have  failed 
to  reply  to  their  notices,  advising  them  that  not  having  heard 
from  them  it  is  assumed  that  renewal  is  not  desired,  and  that  the 
insurance  therefore  stands  canceled.  The  next  day  about  ten  per 
cent,  or  one  half  of  the  delinquents,  come  in,  state  that  they  have 
forgotten  the  matter,  and  of  course  wish  their  insurance  kept  in 
force.  They,  too,  pay  cash,  and  their  policies  are  mailed  to 
them.  The  remaining  ten  per  cent  are  usually  transients  who 
have  removed  from  the  city,  and  are  therefore  of  no  further  value 
to  the  agency. 

The    notice    system    for   small    accounts    saves   an    immense 


440  LECTURES  ON  FIRE  INSURANCE 


Small  Ac-       amount  of  time  and   removes  one  of  the  most    annoying   features 
counts.  formerly  so  prominent  in  the  matter  of  making  collections.    Each 

agency  should   have  its  own  rule  as  to  usual    limit  of   credit,  and 
follow    it    out   so    far   as  practicable,  making  exceptions    only    in 
special    cases   where    unusual    accommodation    is    reasonable    and 
necessary. 
Remittances.  In  the  matter  of  remittances  all  brokerage  accounts  should  be 

paid  within  thirty  days  or  during  the  month  following  the  issu- 
ance of  policies  as  the  agent  writing  the  business  for  the  agency 
controlling  the  risk  receives  a  small  part  of  the  commission  only, 
and  should  not  therefore  be  kept  waiting  for  the  money  with 
which  to  pay  his  companies.  The  matter  of  remittances  to  the 
companies  by  the  agent  representing  them  is  a  question  for  mutual 
understanding  and  adjustment.  The  companies  have  always 
shown  themselves  very  liberal  in  this  respect,  and  are  always 
ready  to  grant  an  agency  any  accommodation  within  reason,  some 
agencies,  for  local  and  financial  reasons,  requiring  more  latitude 
than  others.  Such  understanding  once  having  been  arrived  at, 
remittances  should  be  sent  promptly  upon  the  dates  agreed  upon 
so  that  the  company  may  know  exactly  what  to  depend  upon  and 
be  saved  the  annoyance  of  letter  writing  or  of  further  action  on 
their  part  or  that  of  their  field  men. 

Importance  of  Promptness  and  Accuracy 
Promptness.  The    importance   of   promptness   and    accuracy    in    the   local 

agency  business  cannot  be  overestimated,  both  being  absolutely 
necessary  for  its  success. 

The  request  of  a  company  for  the  cancellation  or  amendment 
of  a  policy  should  be  acted  upon  with  the  same  promptness  with 
which  an  order  for  new  business  from  a  property  owner  is  exe- 
cuted. Many  an  agent  has  learned  to  his  cost  the  embarrassment 
that  is  likely  to  follow  his  delay  in  carrying  out  instructions  of 
this  character,  particularly  when  the  risk  burns  prior  to  his 
having  done  so. 

Promptness  in  completing  an  order  from  the  assured  is 
equally  important,  and  the  line  should  be  bound  immediately, 
and  a  written  binder  given  or  mailed  the  property  owner,  stating 
in  which  company  the  insurance  has  been  placed,  unless  there  is 
time  to  issue  the  policy  itself,  upon  the  day  the  order  is  received. 

The  necessity  of  accuracy  has  already  been  emphasized  in 
the  opening  paragraph  of  this  address,  and  too  much  stress  cannot 


LOCAL  AGENCY  OFFICE  SYSTEMS  44  J 


be  laid  upon  it.  The  modern  and  more  advanced  systems  which 
have  come  into  vogue,  some  of  which  I  have  tried  to  describe, 
have  done  much  to  assure  accuracy  in  a  greater  degree,  as  they 
are  time  savers  and  therefore  permit  opportunity  for  more  careful 
handling  of  the  different  entries  necessary  in  the  detail  of  an 
agency  office. 

One  of  the  most  valuable  assets  an  agency  can  have  is  a 
reputation  for  promptness  and  accuracy,  which  is,  I  believe, 
usually  given  full  recognition  both  by  the  companies  and  by  the 
assured. 

BIBLIOGRAPHY 

Cook,  J.  Thornton:   How   to   work    insurance   agencies.      94  p., 

London,  1909.     Guilbert  Pitman,  Pub. 
Crawford,     William    S.  :    Pointers    for     local     agents.       2.55    p. 

Chicago,  1908.      Western  Underwriter  Co. 
Eke,    J.    A.:    The    elements    of    insurance.       127    p.,     London, 

1910.       Isaac  Pitman  &  Sons,  Ltd.,  Pub. 
Hardy,  E.   R.   and    Lindner,  Walker:   Insurance    and   real    estate. 

204    and    505    p..  New    York,  1911.      Alexander    Hamilton 

Institute. 
Moore,  F.  C.  :   Fire   insurance  and   how   to   build.      800   p.  New 

York,  1903.      Baker  Taylor  Co. 
National  Association  of   Local  Fire   Insurance   Agents:   Bulletin. 

Published  monthly    in    the   interest    of   local    agents,  Boston, 

Mass. 
Rough   Notes:   In   the    front    office.       Plans    and    suggestions    for 

writing  more  fire  insurance.      124  p.,  Indianapolis,  1910. 
Right  to  the  point.    A  manual  for  fire  insurance  agents. 

75  p.,  Indianapolis,  1902. 
Schmidt,  Oscar:   Fire    insurance   practice.      56   p.,    Indianapolis, 

1910.      The  Rough  Notes  Co.,  Pub. 
Sweetland,  Charles   A.  :   Insurance   and   real   estate  accounts.      A 

working   handbook   of   modern   methods.      154,  48   and   viii. 

p.,  Chicago,  1910.      American  School  of  Correspondence. 
Von   Szeliski,  Paul:   Office   records   of   a    fire    insurance   agency. 

Proceedings,    Toronto   (Can.)  Insurance   Institute,  1908-09  : 

65-78. 


NOTES  ON  LOCAL  AGENCY  COMPENSATION 

Introduction  For  the  last   forty  years  the  question  of   proper  compensation 

for  the  local  agent  of  fire  insurance  companies  has  been  one  of 
the  livestof  the  live  issues  of  the  business  in  this  country,  and  not 
a  month  has  passed  but  there  have  been  sharp  discussions  and 
sincere  disagreements, — as  well  as  some  not  entirely  sincere, — on 
its  merits.  It  is  hardl\-  possible  to  believe  that  there  will  be  a 
continuance  of  the  present  unsatisfactory  conditions  for  even  a  few 
years  in  the  future,  because  this  item  of  the  expense  account  of 
the  companies  is  a  focus  of  the  attention  rot  only  of  company 
managers  and  directors  and  agents,  but  of  the  heads  of  insurance 
departments  and  prominent  legislators  throughout  the  country. 
The  companies  themselves  are  attempting  with  considerable  suc- 
cess to  adjust  conditions  so  they  will  be  defensible  against  any 
reasonable  investigation  or  inquiry,  while  the  recent  conventions 
of  insurance  commissioners  have  expressed  themselves  so  forcibly 
and  clearlv  that  it  is  evident  that  the  companies  will  have  their 
full  support  in  the  endeavor. 

"The  Commission  Question,"  as  it  is  commonly  called,  is 
essentialh-  the  result  of  competition  for  business  among  the  com- 
panies, whose  writing  capacity  is  tested  in  but  few  of  the  larger 
congestions  of  property  value  in  the  great  cities  and  who  naturally 
strive  each  for  itself  for  the  largest  possible  income  from  the 
safer  field  of  the  smaller  communities.  With  the  establishment  of 
generally  uniform  rates  in  the  latter  part  of  the  nineteenth  century 
came  the  secondary  competition,  inside  the  agencies,  by  rearrange- 
ment and  increase  of  the  compensation  allowances.  These  have 
not  been  harmonized  by  agreements  anything  like  in  extent 
those  which  control  rates  of  premium,  and  conscquentl}- the  average 
commission  allowance  has  steadily  increased  until  in  1911 
(quoting  from  the  report  of  the  joint  committee  of  the  New  York 
Senate  and  Assembly)  it  was  represented  by  approximately 
21  5-10%  of  the  premium  and  more  than  50%  of  the  entire 
expense  of  transacting  the  business.  In  this  connection  it  is  well 
to  know  that  for  many  years  of  the  earlier  history  of  the  fire  insur- 
ance  business    in    this  countr\    the  agents   were  allowed    but    •)% 


NOTES  ON  LOCAL  AGENCY  COMPENSATION 


443 


commission,  with    an    occasional    agreement   to   pa\-   10%    if   the   Early 
income  from  the  agency  would  justify  such  extravagance.      There   Compensa- 
were,    to   be   sure,  fees   for    issuing     policies    and   endorsements,    ^'o" 
but   these  were  paid   by   the    insured.      It    is    reported   that   some 
agents   in  those   days  received   no  commission  at  all   and   derived 
their    whole     income    from     the    survey     fees,    policy    fees    and 
brokerage  paid   by  their  customers.      The  Philadelphia  Chamber 
of  Commerce  in  1823  provided  a  maximum  fee  of  5%  for  fire  in- 
surance brokerage,  to  be  paid  by  the  purchaser  of  the  insiirance. 
The    statistics   of   the    National  Board  of  Fire  Underwriters 
include   the  following  table,  which  shows  the  average  expense  of 
the  stock  companies  in  the  United  States  and  the  average  commis- 
sion, from  1860-1910  inclusive. 


All  Stock  Companies  in  the  U.  S. 


Av.  Rate. 

Av.  Expense. 

Av.  Com 

1860- 

1870 

31.06 
33.16 

11.32 
14.09 

71- 

80  . 

.   .9432 

81- 

90  . 

.   .9880 

35.16 

17.95 

91- 

00  . 

.  1.0313 

36  69 

19.25 

01  . 

.  1.0605 

37.45 

20.76 

02  . 

.  1.1518 

35.73 

20.28 

03  . 

.  1.1874 

36.89 

21.31 

04  . 

.  1.1613 

36.93 

21.22 

05  . 

.  1.1679 

36.92 

21.45 

06  . 

.  1.1469 

38.65 

21.45 

07  . 

.  1.1697 

38.16 

21.22 

08  . 

.  1.1444 

39.24 

21.89 

09  . 

.  1.1223 

38.50 

21.50 

10  . 

.  1.0822 

39.16 

21.61 

1860-1910  . 

.  .  1.0637 

36.23 

18.95 

The  available  literature  on  this  subject  is  very  limited  in 
quantity  and  with  few  exceptions  deficient  in  quality  (the  ex- 
ceptions being  listed  at  the  end  of  these  notes),  as  it  consists 
largely  of  partisan  pronouncements  intended  to  emphasize  the 
arguments  and  promote  the  interests  of  the  writers  without 
attempting  to  weigh  fairly  the  propositions  with  which  they  were 
not  in  agreement.  It  will  be  the  endeavor  in  this  discussion  to 
show  the  relations  of  the  several  interests  involved,  to  describe 
compensation  methods  in  actual  use  and  to  present  theoretical  and 


444  LECTURES  ON  FIRE  INSURANCE 


practical  arguments  pro  and  con  without  any  attempt  to  prejudice 
the  student  imduly. 
Parties  The  compensation  of   the  local    fire   insurance  agent  is  a  sub- 

Interested  ject  of  legitimate  interest  not  only  to  him,  but  to  the  companies 
\yhich  he  represents  and  also  to  the  public  whose  money  he  col- 
lects and  disburses.  To  him  the  income  from  his  profession  is 
his  means  of  liyelihood,  and  naturally  his  first  desire  is  to  maintain 
it  at  the  highest  possible  figure.  Many  agents  never  look  at  any 
other  phase  of  the  question.  Those,  however,  who  incline  toward 
thoughtful  study  and  sound  reasoning  will  observe  that  high  com- 
missions mean  more  agents  and  brokers  and  therefore  keener  com- 
petition, and  also  that  the  value  to  his  office  of  companies  whose 
commission  allowances  are  quite  moderate  is  often  greater,  because 
of  other  conditions,  than  that  of  the  "high  commission"  com- 
panies. These  are  valid  considerations,  and  have  led  many  an 
agent  to  come  to  the  conclusion  that  high  commission  is  a  worse 
evil  than  low  commission,  and  that  quality  of  company  represen- 
tation and  permanence  in  the  business  do  not  always  go  hand  in 
hand  with  the  highest  figure  of  income. 

The  second  interested  party  is  the  company,  whose  expense 
account  must  be  exhibited  to  the  world  and  defended  to  its  directors 
and  stockholders,  as  well  as  to  those  whose  interest  is  more  general. 
The  manager  of  the  company  is  entrusted  with  the  work  of 
increasing  his  principal's  income  without  exceeding  a  moderate 
and  reasonable  loss  ratio,  and  is  faced  daily  with  the  proposition 
that  the  only  way  to  bring  about  such  results  is  to  pay  his  agents 
more  for  the  business  produced.  He  is  in  competition  with  hun- 
dreds of  others,  and  he  is  wise  indeed  if  he  can  so  steer  the  busi- 
ness of  his  companies  as  to  avoid  the  Scylla  of  excessive  losses 
and  the  Charybdis  of  abnormal  expense. 

The  third  and  perhaps  most  powerful  interest  is  that  of  the 
public,  which  sees  in  fire  insurance  only  an  elaborate  system  of 
taxation,  and  often  fails  to  appreciate  any  of  the  benefits  resulting 
therefrom  or  the  immense  amount  of  labor  and  detail  connected 
therewith.  Through  state  legislatures  and  insurance  departments 
there  is  from  year  to  year  more  and  more  insistence  upon  the 
demand  that  the  fire  insurance  companies  shall  conduct  their 
business  openly  and  efficiently  and  be  prepared  to  defend  their 
rates  not  only  from  the  standpoint  of  losses  incurred  and  paid  but 
also  in  the  details  of  expense.  It  is  not  necessary  that  expense 
be    kept     at    an   extremely    low    figure,    Init   the   public    must   be 


NOTES  ON  LOCAL  AGENCY  COMPENSATION  445 


convinced  it  has  quid  pro  quo.  There  is  no  objection  to  the 
heavy  expense  for  example  of  transacting  steam  boiler  insurance, 
because  the  accompanying  inspection  system  is  clearly  of  great 
value.  The  public  reasonably  insists  that  commensurate  values 
shall  be  demonstrated  for  that  part  of  the  premiums  paid  which 
is  consumed  by  commission  and  other  operating  expenses.  It  is 
well  to  keep  in  mind  these  three  interests  of  the  agent,  the  com- 
pany and  the  public  in  forming  conclusions  about  the  subject  in 
hand. 

As  a   first   principle    it   may  be  stated    that    in   every   agency   Uniform 
surely  and    in   e\eYy  cowA-nwnxiy  -pYeiernhXy  the  system  of  compcit-   Plan 
sation  should  be  uniform.       The    protection    of    the    public    and    Necessary, 
fair  treatment  of  the  companies  require  that  competition  for  busi- 
ness and  the  distribution  of   premiums  should   be  on   the  basis  of 
quality  of  indemnity  only  and  should  not  be  dependent  upon  per- 
centage  of  commission,  which  might  induce  agents  to    adopt   the 
tactics  of  tradesmen   who    offer   something  "just    as  good"  when 
standard   commodities  are  asked  for. 

Whatever  may  be  said  in  these  notes  about  the  various 
schemes  of  compensation  will  be  based  upon  the  assumption  that 
the  agent  has  a  uniform  system  in  vogue  with  all  of  his  com- 
panies, and  that  there  is  no  disposition  to  play  one  against 
another. 

In  practice  there  are  three  well  known  compensation  systems  Systems  in 
clearly  divided  in  principle  and  application  and  each  having  its  Use. 
advantages  and  disadvantages.  They  are  known  as  (tr)  Flat  Com- 
missions, (/>)  Flat  and  Contingent  Commissions  and  (c)  Graded 
Commissions.  Of  these  the  first  mentioned  was  the  first  used 
and  is  the  best  known.  Under  its  provisions  the  agent  retains 
the  same  percentage  of  commission  from  all  premiums  on  all 
classes  of  risks.  It  is  wholly  consistent  with  the  average  theory 
of  fire  insurance  and  has  the  practical  advantage  that  it  indicates 
to  the  public  that  there  is  no  discrimination  in  rates  or  among 
risks.  It  is  a  popular  system  as  the  accounts  are  easily  kept 
without  chance  of  disagreement  or  error  and  the  agent  at  all  times 
has  accurate  knowledge  of  his  income. 

The  objections  most  often  offered  are  that  the  agent  is  en- 
couraged to  over- insure  property,  or  at  best  is  not  discouraged 
against  such  practice,  his  interest  being  only  in  the  volume  of 
premiums  written ;   and  also  that   it   tends   to  excessive  brokerage 


446  LECTURES  ON  FIRE  INSURANCE 

where   agents    are    greedy    in    their     competition    for    insurance 
placed  by  middlemen.      The  very  fact  that  an  agent  can  figure  his 
income   so    closely    and    accurately    enables    him    to   run    up    the 
brokerage  allowance  to  inordinately  high  figures. 
Flat  and  Con-  (6)  Flat  and  contingent  commissions  are  generally  understood 

tjngent  Com- jq  mean  a  flat  minimum  percentage  allowance  to  the  agent  from 
missions.  month  to  month  on  premiums  reported,  with  additional  payment 
at  the  end  of  a  term,  usually  one  year,  if  the  underwriting  result 
of  the  business  from  his  agency  has  been  profitable.  A  sample 
form  of  agreement  between  company  and  agent  for  such  com- 
pensation is  the  following: — 

"  This  Memorandum  of  Agreement  niade  this day 

of  191 ,  by  and  between  the FIRE  IN- 
SURANCE COMPANY  of ,  and Agent  of 

said  Company  at 

Witnesseth:  That  in  consideration  of  the  compensation  here- 
inafter named,  the  said  Agent  hereby  agrees  faithfully  to  represent 
the  said  Company  in  all  matters  pertaining  to  and  within  the  juris- 
diction and  scope  of  the  Agency,  and  with  fidelity  to  serve  said 
Company  in  the  capacity  of  Agent,  using  his  best  endeavors  to  in- 
crease the  \olume  and  improve  the  quality  of  the  business  written 
for  said  Company  at  the  Agency  from  year  to  year,  and  in  consid- 
eration of  such  faithful  service  the  said Company 

agrees  to  allow  the  said  Agent  the  following  compensation,  to  wit  : 

Fifteen  per  cent  flat   commission  on  the  amount  of  the    net 

premiums    remitted    monthly  by   said    Agent  to  the 

Company,  and  an  additional  profit  sharing  commission  of  Ten  per 
cent  on    the  net  results  of    the  business  of    the  Agency   for  each 

profit  sharing  year  ending  on  the  last  day  of ,  the 

said  profit  sharing  commission  to  be  computed  by  deducting  from 
the  net  premiums  written  and  remitted  to  the  Company  for  that 
year,  the  sum  of  the  losses  incurred  during  that  year  on  risks  in 
"force  on  the  books  of  the  Company  at  said  Agency,  whether  placed 
there  by  present  Agent  or  turned  over  to  him  for  supervision  and 
attention  at  expiration,  and  on  all  risks  hereafter  written  by  said 
Agent  in  said  Company,  together  with  all  expenses,  including  state 
and  local  taxes  and  licenses. 

It  is  mutuallv  agreed  that  the  foregoing  commissions  include  all 
Agency  expenses  such  as  postage,  exchange,  advertising,  solicitor's 
fees,  personal  local  license  fees,  clerk  hire,  rent,  services  of  agents 
in  adjusting  losses  under  policies  issued  at  the  Agency  and  all  other 
Agency  charges  whatsoe\er,  excepting  only  maps,  map  corrections, 
advertising  as  required  by  law  and  Local  Board  expenses  and  taxes. 

It  is  understood  that  the  words  "net  premiums"  wherever 
they  occur  in  this  agreement,  mean  gross  premiums  \\ritten  less 
return  premiums  and  premiums  on  policies  not  taken. 


NOTES  ON  LOCAL  AGENCY  COMPENSATION  447 

It  is  understood  that  at  the  expiration  of  the  profit  sharing-  year 
the  said  Company  will  make  up  the  profit  sharinjj;  account,  and  on   Form  of 
request  will   remit  (all  premiums  for  the  profit  sharinoj  year  ]:)ein^    Commission 
paid  and  not  otherwise)  the  amount  found  to  be  due,  if  any,  or  that   Agreement, 
the  Agent  will  charge  the  same  in  the  next  monthly  report. 

In  view  of  the  fact  that  said  Agent  is  not  charged  with  un- 
earned premium  in  computing  the  net  results  for  the  profit  sharing 
year  he  is  to  have  no  compensation,  profit  sharing  or  otherwise,  on 
the  business  or  its  profits  after  the  termination  of  the  Agency. 

It  is  further  understood  that  this  agreement  shall  continue 
from  year  to  year  unless  terminated  by  either  party,  the  right  of 
resignation  or  removal,  at  any  time,  being  recognized  by  both 
parties. 

It  is  understood  that  if  the  Agency  is  terminated  by  either 
party  before  the  end  of  any  profit  sharing  year  the  said  Agent  will 
be  paid  the  profit  sharing  commission,  if  any  is  due,  at  the  end  of 
the  profit  sharing  year  on  the  net  results  of  the  business  written 
from  the  beginning  of  the  profit  sharing  year  to  the  termination  of 
the  Agency,  but  to  include  all  losses  to  the  end  of  the  full  profit 
sharing  vear. 

This  agreement  takes  the  place  of  and  abrogates  any  contract, 
agreement  or  understanding,  referring  to  compensation  to  be  paid 
said  Agent,  whether  verbal  or  written,  of  prior  date,  between  the 
parties  mentioned  herein  and  is  to  take  effect 191    " 

The  theory  of  this  method  of  compensation  is  that  the  flat 
allowance  takes  care  of  the  ever  present  element  of  luck,  and 
if  fortune  is  against  the  agent  and  his  "good  risks"  burn  he 
still  has  in  hand  a  fair  remuneration,  while  beyond  that  the  offer  of 
contingent  payment  induces  him  to  guard  against  o\  er-insurance, 
to  use  to  the  fullest  extent  his  local  knowledge  and  ability  in  the 
selection  of  customers  and  risks,  to  interest  himself  in  building 
construction,  fire  protection,  rates,  adjustment  of  losses,  etc.  This 
theoretical  argument  is  generally  recognized  as  having  great  actual 
value  as  well.  An  additional  practical  advantage  is  that  the 
limited  flat  commission  is  a  check  against  excessive  brokerage 
and  rebating,  the  certain  income  being  too  small. 

Against  this  plan  it  is  urged  that  it  is  wrong  in  theory,  being 
a  wide  departure  from  the  average  basis  of  the  business.  The 
treatment  of  agency  accounts  becomes  absolutely  local,  often  even 
to  such  a  degree  that  the  safety  or  loss  of  a  single  risk  determines  an 
an  agent's  compensation  for  a  year  or  more.  It  is  applied  specifically 
to  the  business  of  a  single  agency  in  a  single  community,  and  is  based 
on  the  returns  for  a  given  term  of  months,  usually  one  year.  A 
loss  in  December  has  no  effect  beyond  the  end  of  that  month,  while 


448  LECTURES  ON  FIRE  INSURANCE 

a  loss  ill  January  may  '•  spoil  the  record  "  for  a  year.  This  plan 
induces  an  agent  to  follow  the  rule  '■'■  small  lines  and  scatter  your 
risks,"  which  often  means  that  lines  are  too  small  and  t(;o  scattered 
because  of  the  agent's  timidity  or  conservatism,  and  that  he  places 
outside  his  office  lines  which  could  be  carried  easily  bv  his  companies 
or  loads  his  office  w^ith  too  manv  companies  for  the  same  reason. 
This  is  especially  true  of  sprinklered  business  on  which  rates  are 
low  and  companies'  authorizations  often  extremely  large. 

Because  of  the  many  and  strong  arguments  in  favor  of  some 
form  of  flat  and  contingent  allowance  that  plan  is  the  choice  of 
many  of  the  most  thorough  students  of  the  theory  and  practice  of 
the  business,  including  in  their  number  the  in\estigating  committees 
of  several  conservati\e  legislatures.  It  is  their  opinion  that  a 
closer  affiliation  of  the  agent  with  the  company  will  result  from 
such  an  arrangement,  and  will  bring  about  improved  conditions,  in- 
cluding the  elimination  of  many  crooked  losses,  which  will  be 
apparent  in  a  reduction  of  the  fire  cost  of  the  nation. 
Graded  Com-  (<^)     The  third  form  of  commission  plan  is  known  as  Graded 

missions.  Commissions.       A     form     of     agreement    between    company    and 

agent  is  as  follows: — 

It  is  hereby  Agfreed  between  the  company  and  the  agent  as 
follows: — 

(1)  The  agent  agrees  to  perform  faithfully  all  his  duties  as 
agent  of  the  company  during  the  life  of  this  agreement  and  to 
further  its  interests  in  every  legitimate  way. 

(2)  The  agent  agrees  that  he  will  not,  during  the  life  of 
this  agreement,  accept  from  any  other  company  or  companies, 
directly  or  indirectly,  on  any  fire  or  tornado  risk  or  classes  of 
risks,  commissions  or  emoluments  of  any  description  higher  than 
or  different  from  the  commissions  hereinafter  in  this  article  (2) 
defined;  and  (so  long  only  as  the  agent  observes  such  stipulation) 
the  company  agrees  to  pay  and  the  agent  agrees  to  accept  as  full 
compensation  on  business  written  by  him  for  it  commissions  at 
the  following  rates,  viz.  : — 

(a)  Twenty-five  per  centum  (25 ^^  )  on  the  following  build- 
ings and  their  contents,  viz.  :  Dwellings  (excluding  farm  prop- 
erty), private  barns  (when  insured  in  connection  with  dwellings), 
hospitals  (when  no  patients  are  under  legal  restraint),  institutions 
and  homes  for  the  deaf,  dumb,  aged  or  blind  or  for  soldiers  or 
sailors,  federal,  state,  county  and  city  public  buildings,  art  gal- 
leries and  museums,  waterworks  and  pumping  stations,  police, 
fire  department  and  patrol  stations,  libraries  (public  or  proprie- 
tary), observatories  and  other  so-called  public  buildings  (except 
those  specifically  classed  elsewhere),  not  including  special  hazards 
owned  or  operated  by  the  public. 


NOTES  ON  LOCAL  AGENCY  COMPENSATION  449 

(/')      Twenty  per  centum  (20%)  on   the   following   buildings   Graded 
and   their   contents,  viz.  :    Churches,   chapels,  synagogues,  lecture   Commis- 
halls,  colleges,  academies,  boarding  and  day  schools,  seminaries,    sions. 
monasteries,  convents  and  polytechnic  institutes. 

(r)  Twenty  per  centum  (20^)  on  the  following  buildings 
(not  contents),  viz.  :  Brick  or  stone  mercantile  buildings  occu- 
pied exclusively  for  the  following  purposes  with  or  without 
dwelling  occupancy,  viz.  :  Mercantile,  office,  public  hall  (with- 
out stage  or  movable  scenery),  masonic  or  other  orders  for  lodge 
purposes  or  for  Y.  M.  C.  A.  purposes. 

(d)  Twenty  per  centum  (20%)  on  tornado  business. 

(e)  Fifteen  per  centum  (1-3%)  on  the  contents  of  brick  or 
stone  mercantile  buildings  occupied  exclusively  for  the  following 
purpose  with  or  without  dwelling  occupancy,  viz.  :  Mercantile 
office  public  hall  (without  stage  or  movable  scenery).  Masonic  or 
other  orders  for  lodge  purposes  or  for  Y.  M.  C.  A.  purposes,  and 
on  the  following 

Buildings  and  their  contents,  viz.  :  Insane  asylums,  retreats, 
sanitaria,  penitentiaries,  poorhouses,  reformatories,  workhouses, 
special  hazards  owned  or  operated  by  the  public,  and  on  farm 
property,  and  on  all  other  classes  of  risk  not  enumerated  else- 
where herein,  excepting  automobile  floater  insurances  which  are 
not  covered  by  this  agreement. 

(/")  The  commission  on  the  premiums  of  policies  covering 
leases,  rents,  use  and  occupancy,  and  jDrofits  and  commission,  to 
he  the  commission  applicable  to  the  building  wherein  or  whereon 
or  to  which  such  lease,  rent,  use  and  occupancy,  and  profits  and 
commission  insurance  applies. 

(»•)  Each  and  all  of  the  foregoing  commissions  to  include 
all  agency  expenses  such  as  postage,  exchange,  advertising, 
solicitors'  fees,  personal  local  license  fees,  clerk  hire,  rent,  serv- 
ices in  adjusting  losses  under  policies  issued  at  the  agency  and 
all  other  agency  charges  whatsoever,  excepting  only  maps,  map 
corrections,  advertising  as  required  by  law  and  local  board 
expenses  and  taxes. 

The  theory  of  this  method  is  that  among  the  various  classes  of  Graded 

risks  distinguished  either  by  construction,  occupancy  or  protection,    ^ommts- 

there  are  different   degrees  of   desirability    from  an  underwriting    . 

^  -^  *'    Agreement, 

viewpoint,  and  also  that  there  is  a  disproportion  of  agents'  labor 

and  expense  among  the  classes.      It   is  argued   that   even   at   rates 

acknowledged  to  be  fair  measures  of  the  actual  loss  cost   incurred 

there  will  still  be  "preferred"  risks  ;  /.  c,  those  which  can  be  under- 

^vritten  more  safely  than  others  because  of  the  comparative  absence 

of  the  element  of  luck  and  chance  and  of  conditions  not  contemplated 

in  the  rate,  the  most  prominent   being  the   dw^elling  class,  which 

is  "preferred"  because  of  the  comparative  absence  of   conflagra- 


450 


LECTURES  ON  FIRE  INSURANCE 


tion  hazard  and  moral  hazard.  Mercantile  property  generally 
speaking  is  exposed  to  both  of  these  undesirable  conditions,  and 
manufacturing  risks  are  continually  developing  unforeseen  changes 
of  internal  hazards. 

It  is  claimed  also  that  the  highest  figure  of  commission  is 
compensation  to  the  agent  for  getting  the  class  of  business  which 
requires  numerous  small  accounts,  that  occupy  in  proportion  more 
of  his  time  and  that  of  his  office  force  than  do  those  of  the  larger 
insurers  of  mercantile  and  manufacturing  property;  moreover  that 
the  "preferred"  business  being  usually  written  for  a  term  of 
years,  an  agent  has  not  the  renewal  commission  so  frecjuently  and 
is  entitled  to  more  on  that  account.  From  the  companies'  stand- 
point it  is  probably  true  that  the  highest  commission  can  be 
afforded  o\\  classes  of  business  not  requiring  expenditure  for  maps, 
bureau  surveys  or  other  special  inspection,  and  where  renewal 
transactions  are  three  or  five  years  apart. 

The  opponents  of  graded  commissions  object  that  encourage- 
ment is  offered  thereby  to  over-insure  property  and  to  overlook  the 
moral  hazard,  as  mentioned  in  discussing  flat  commissions,  and 
furthermore  than  the  indication  to  the  public  and  its  representa- 
tives is  that  rates  are  unreasonably  high  on  the  so-called  "pre- 
ferred" classes  and  that  these  classes  are  carrying  a  part  of  the 
load  which  should  be  borne  by  others.  This  system  allows  of  ex- 
cessive brokerage  and  rebate  to  an  extent  even  greater  than  do  flat 
commissions,  and  there  is  necessarily  a  great  deal  of  detail  in  the 
accounting  and  reporting,  so  that  over  charges  (and  indeed  under 
charges  occasionally)  are  made  by  agents,  resulting  in  more  or 
less  irritating  disagreements  and  correspondence. 

To  be  practically  successful  this  system  should  be  reinforced 
by  classification  letters  opposite  all  risks  in  the  printed  tariff  of 
Commissions. j.^j-gg^  3j-,^|  I^q  |-,g  defensible  against  investigation,  graded  commis- 
sions should  be  based  upon  statistics  of  evident  value. 

From  the  foregoing  it  is  apparent  that  there  are  serious  ob- 
jections and  practical  arguments  against  each  of  the  systems  of 
compensation  now  in  use.  It  is  not  to  be  hoped  that  a  perfect 
system  will  be  evolved,  but  surely  some  improvement  may  be 
expected.  The  flat  and  contingent  j^lan  is  supported  by  so  many 
who  influence  legislation  on  the  subject  that  it  is  surely  woith 
while  to  devote  critical  thought  to  its  strength  and  weakness, 
and  in  this  connection  the  suggestion  has  been  brought  forward 
recently  that  a  modification  of  that  method  as  at  present  operated 


Objections 
to  Graded 


NOTES  ON  LOCAL  AGENCY  COMPENSATION  45 J 

could  be  made  which,  while  retaining  existent  features  of  recog- 
nized worth,  would  widen  their  application  and  thus  add  to  their 
value  and  bring  the  scheme  closer  to  the  general  principle  of 
broad  average  which  underlies  the  whole  of  the  theory  and  prac- 
tice of  fire  insurance. 

It  is  evident  that  the  application  of  the  extra  contingent 
expense  to  the  business  of  the  individual  agency  impairs  its  value, 
because  no  one  agent  transacts  an  average  of  business,  and  few 
approach  even  remotely  to  an  average  of  the  business  of  their 
own  communities.  This  is  proportionally  true,  of  course,  of  the 
business  of  any  whole  state,  which  fails  of  producing  an  absolute 
grand  average,  but  the  control  of  companies'  operations  is  so 
emphatically  divided  among  the  several  states  that  it  would  be 
futile  to  attempt  any  plan  involving  more  than  a  single  state  in 
its  scope.  So  in  brief,  the  suggestion  is  that  all  the  agents  of  each 
company  in  each  state  be  compensated  by  a  uniform  minimum 
flat  commission  plus  a  contingent  share  of  the  state  tinderwriting 
pfofit  of  that  company;  /.  <?.,  the  difference  between  the  company's 
income  from  business  in  the  state  and  an  amount  equivalent  to 
the  company's  losses  in  the  state  and  its  special  state  expenses, 
such  as  taxes,  fees,  and  other  similar  items. 

It  is  argued  that  such  a  plan  would  insure  the  intelligent 
co-operation  of  agents  not  only  in  their  own  communities,  but  on 
the  broader  field  of  their  whole  states  as  well,  with  consequent 
desirable  changes  in  the  attitude  of  many  state  legislatures  toward 
the  fire  insurance  industry.  It  would  have  a  "steadying"  effect 
on  the  local  agent,  for  he  would  be  reasonably  assured  of  a  contin- 
gent income  in  every  year  of  normal  profit  in  the  state,  even 
though  his  little  agency  might  be  a  loser.  It  would  interest  him 
in  the  larger  problems  of  his  business,  such  as  rate-making, 
appointment  and  licensing  of  agents,  insurance  education  and  all 
the  other  considerations  which  affect  the  average  results  of  a 
whole  state  more  noticeably  than  those  of  a  single  town  or  city. 
And  it  would  draw  agents  and  business  to  the  best  managed 
companies. 

It  is  not  intended  in  this  lecture  to  express  any  opinion  as  to  Conclusion, 
the  proper  average  percentage,  however  reached,  by  flat,  contin- 
gent, or  graded  plan,  which  an  agent  should  receive  for  his 
service  to  his  principals.  It  is  evident  that  the  average  actually 
paid  by  the  companies  at  the  present  time  is  higher  than  is 
necessary  or  healthy.      The  agent  retains  little  more  than    he  had 


452  LECTURES  ON  RRE  INSURANCE 


fifty  years  ago,  giving  up  the  difference  to  sub-agents  or  brokers 
wherever  the  higher  figures  of  commission  are  paid,  and  thus 
encourages  and  feeds  competitive  conditions  to  his  own  detri- 
ment. It  is  a  source  of  much  interest  and  some  wonder  to  inves- 
tigators that  the  middleman,  who  is  in  no  sense  the  representative 
of  either  company  or  agent,  should  be  paid  by  them — liberally  too 
— instead  of  by  his  principal.  Whatever  conclusions  we  may 
reach  should  be  tempered  by  realization  of  this  feeling  on  the 
part  of  representatives  of  the  public  and  by  the  knowledge  that 
commissions  which  are  more  than  fair  compensation  for  service 
rendered  will  ultimately  fall  to  their  right  level. 


QUESTIONS 

1.  Of  each  dollar  of  premium  received  by  stock  comjDanies, 
how  much  (approximately)  is  retained  for  total  expenses?  How 
much  is  paid  for  commissions? 

2.  What  are  the  plans  in  common  use  for  compensating 
agents  ? 

3.  Explain  each  briefly. 

4.  Which,  in  your  opinion,  is  the  most  defensible,  and  why? 
Compare  with  other  systems  and  explain  respective  advantages 
and  disadvantages. 

5.  Name  some  of  the  evils  of  high  commissions. 


BIBLIOGRAPHY. 

Barry,  James  V.  :  Some  present  day  prolilems.  American  Agency 
Bulletin,  8:5:11.      (October,  1910.) 

Johnson,  O.  E.  :  Relative  merits  of  flat,  graded  and  contingent 
commissions.  American  Agency  Bulletin,  4:6:16.  No- 
vember, 1906. ) 

Law,  Harrison:  Fire  Insurance  expense  ratio  tables.  Published 
annually,  Nutley,  N.  J. 

McGivney,  Eugene  J.  :  Commissions  to  agents  as  an  item  of 
expense  in  fire  insurance.  Proceedings  National  Convention 
of  Insurance  Cominissi oners,  39:2(50-267. 


NOTES  ON  LOCAL  AGENCY  COMPENSATION  453 


National  Board  of  Fire  Underwriters:  Annual  reports.  Statis- 
tical tables  showing-  rate  of  commission  paid  each  year. 

National  Convention  of  Insurance  Commissioners:  Report  of 
special  committee  appointed  to  investigate  expenses  of  fire 
insurance  companies.  James  V.  Barry,  Chairman.  Proceed- 
ings National  Convention  Insurance  Commissioners,  1910:61, 

New  York  State:  Report  of  joint  committee  of  senate  and  assem- 
bly of  state  of  New  York  appointed  to  investigate  corrupt 
practices  in  connection  with  legislation  and  the  affairs  of 
insurance  companies  other  than  .  .  .  life,  164  p.,  Albany, 
1911.     See  pp.  92-102. 

Pellet,  Clarence  S.  :  The  agent's  interest  in  the  commission  ques- 
tion.     American  Agency  Bulletin,  -4:6:16  (November,  1906). 


OFFICE  ORGANIZATION  AND  MANAGEMENT 

SYNOPSIS 
Introduction. 

1.  Capital  required. 

2.  To  get  the  companies. 

(a)     The  man  with  business. 

(1)      The  sub-agency  man,  or  broker. 
(3)     The  man  without  business. 

(1)      Using  the  state  list  of  companies. 

(c)  Buying  an  agency. 

(1)      The  cost. 

(zu)     The  demand. 

(v)      Annual  income. 

(y)      Amount  of  direct  business. 

(z)      Retaining  the  companies. 

(d)  The  total  number  of  companies  to  have. 

3.  Inside  work  (except  systems). 

(a)     Need  of  a  clerk  or  office  hours. 

(/))     Need  of  a  telephone,  typewriter  and  map. 

(c)  Method  of  paying  companies. 
•4.      Outside  work. 

(a)     Personal  solicitation. 

(d)  Advertisements. 

{c)     Knowledge  of  rules,  forms  and  customs. 
5.      Continued  efficiency. 

(a)      Natural  loss  of  expirations. 
{/>)     Activity  in  Board. 

(c)  Association  with  local  interests. 

(d)  The  breadth  of  the  business. 
Conclusion. 

Introduction.  The   writer,  entering   upon   the   preparation   of  this  lecture, 

was  much  impressed  with  the  absence  of  any  literature  bearing 
particularly  upon  the  subject  now  touched  upon,  and  what  is  here 
outlined  is  the  result  of  actual  experience  in  the  field  with  the 
formation,  organization  and  management  of  agencies,  having  also 
in  mind   certain    ideals  that   he   feels  every  agent  should  of  neces- 


OFFICE  ORGANIZATION   AND  MANAGEMENT  455 

sity  have,  if  he  is   to  prosecute  the  business  which    he   has  taken 
lip  as  a  life  work. 

I  have  divided  the  subject  into  five  chisses,  with  further  sub- 
divisions as  contributory  to  the  subject  under  discussion  as  shown 
in  the  synopsis. 

A  successful  agency  should  have  a  certain  amount  of  capital.  Capital. 
The  amount,  of  course,  is  entirely  dependent  upon  the  extent  of 
the  business  done,  and  the  credits  to  be  extended  by  the  agent. 
Very  often  a  local  agent  entering  a  new  community  finds  that  the 
older  agencies  have  established  systems  of  long  credit.  In 
competition  with  them  he  of  necessity  will  have  to  be  more 
or  less  liberal  with  this  accommodation.  In  fact,  almost  all 
mercantile  concerns  have  a  definite  method  of  paying  their 
bills,  and  in  many  cases  discounts  are  given  for  prepayment,  an 
incentive  impossible,  of  course,  in  the  insurance  business.  In 
my  opinion,  if  the  companies  were  to  grant  a  discount  for  pre- 
payment of  a  bill,  it  would  mean  a  relatively  higher  rate  of 
premium.  The  companies  in  an  agency  generally  arrange  a 
basis  for  the  payment  of  accounts,  and  it  is  generally  accepted 
that  the  maximum  time  allowed  is  sixty  days  from  the  sending  of 
the  monthly  account.  All  this  I  think,  cannot  but  impress  upon 
you  the  fact  that  capital  is  an  absolute  necessity,  and  I  know  from 
various  conversations  with  leading  agents  that  the  amount  of 
money  that  is  at  all  times  being  carried  in  their  business  is  aston- 
ishing, and  will  compare  with  the  amount  of  capital  required  in 
many  lines  of  mercantile  or  manufacturing  business. 

Assuming  that  you  have  the  necessary  capital,  you  now  pro-  To  Get  the 
ceed  to  secure  the  agencies  of  companies  to  be  represented  in  the  Companies, 
community    in  which    you   desire   to  establish   the  agency.      How 

shall  you  proceed.''     A  man  already    in  control  of  some  insurance  

business,  that  is,  the  sub-agent  or  broker,  who  may  have  solicited  /^ 
business  and  reported  through  the  principal  agent,  must  of  ne- 
cessity have  an  advantage  over  one  who  has  had  no  association 
with  the  work.  The  former  in  getting  his  business  would  become 
more  or  less  identified  with  such  companies  as  he  wished  to 
represent.  Under  this  condition  he  naturally  would  make  per- 
sonal application  to  those  companies  whose  policies  he  had 
been  used  to  securing.  A  man  without  this  experience,  and 
without  this  knowledge,  would  be  at  a  loss  how  to  proceed. 
Under  such  condition,  the  state  list  of  companies,  and  their  annual 
statements,   as    published   by   the   Commonwealths    through   their 


456 


LECTURES  ON  FIRE  INSURANCE 


Selection 

of 

Companies. 


insurance  departments,  would  be  the  means  of  securing  informa- 
tion as  to  names,  addresses  and  standing  of  the  companies,  and  a 
careful  canvass  might  win  an  agency.  Possibly  the  following 
clipping,  which  the  writer  took  from  the  New  York  Conimcr- 
cial  Bullet iu^  is  interesting  as  showing  an  up-to-date  application 
for  agencies: — 

"Having  entered  the  domain  of  fire  insurance  in 
the  capacity  of  agent,  it  gives  me  pleasure  to  acquaint 
you  with  this  fact.  As  my  desire  is  to  extend  my  lines 
to  a  point  that  will  make  it  possible  for  me  to  take 
care  of  large  risks,  I  respectfully  submit  my  ability  to 
promote  your  interest  in  this  section,  and  with  such  an 
end  in  view  I  would  like  very  much  to  represent  your 
company.  With  respect  to  equipment.  I  am  fully  pre- 
pared to  compete  for  good  business,  by  which  I  mean 
that  a  large  circle  of  acquaintance,  supplemented  with 
stability  of  credit,  should  suffice  to  assure  you  of  my 
encouraging  outlook  and  financial  responsibility.  Should 
you  feel  disposed  to  take  up  this  matter  with  me,  kindly 
advise  at  your  earliest  convenience  and  oblige." 

Either  method  of  forming  an  agency  must  of  necessity 
be  tedious  and  experimental,  and  wherever  possible,  it  would 
be  advisable  to  buy  an  interest  in  an  already  estalilished  agency, 
or  to  purchase  it  outright. 

This  would  immediately  present  the  c[uestion,  ''What  should 
it  cost.''"  The  cost  to  a  prospective  purchaser  would  naturally 
depend  upon  the  demand  for  the  agency.  In  my  experience  I 
have  known  of  agencies  of  very  limited  income  being  competed 
for  by  three  or  four  responsible  parties  desiring  to  embark  in 
the  business.  I  have  on  the  other  hand  seen  an  agency,  paying 
several  thousand  dollars  income,  where  there  were  hardly  any 
biddei  s  at  all. 

The  next  feature  to  consider  in  our  course  is  the  annual 
income  of  the  agency.  This,  of  necessity,  fluctuates  from  year  to 
year;  it  is  generally  accepted  as  the  average  of  a  five-year 
period,  and  this  average  is  taken  as  the  basis  upon  which  the  final 
price  is  agreed.  Another  feature  in  arriving  at  the  cost  is  the 
amount  of  direct  business.  That  is.  the  amount  of  business  on 
which  the  agent  gets  his  full  commission  as  against  that  portion 
of  it  which  mav  come  to  him  through  brokerage  from  other 
agencies,  and  upon  which  he  must  p:iy  a  In-okerage  commission. 
It  i<!,  I  think,  alwavs  well  to  deduct   this  brokerage  business  from 


OFFICE  ORGANIZATION  AND  MANAGEMENT  457 


the  income,  it  being  at  no  time  stable  and  always  dependent  upon 
the  whim  of  others.  Another  feature  as  to  the  cost  would  be  the 
willingness  of  the  companies  in  the  agency  to  remain  there  and 
commission  the  prospective  purchaser.  It  should  be  easily  seen 
that  where  the  companies  remain  with  a  purchaser,  the  value  of 
the  agency  is  considerably  enhanced,  for  it  is  a  well  known  fact 
that  business  placed  with  various  companies  by  their  agents  over 
a  period  of  years,  in  many  cases  will  follow  to  the  agent  having 
the  agency  of  the  companies.  Although  there  are  instances  Value  of 
where  this  does  not  obtain,  it  is  generally  true  in  the  smaller  Agency 
communities.  After  having  considered  all  these  features,  comes 
the  proposition  of  the  amount  to  be  paid,  and  it  is  a  generally 
accepted  fact  that  two  annual  commissions  is  a  fair  basis  of  pur- 
chase, although  instances  from  one  and  a  half  annual  commis- 
sions to  a  higher  figure  are  not  unusual. 

An  actual  case  particularly  interesting  was  where  the  annual 
commission  income  was  $1,200  a  year  in  a  New  England  city  of 
large  population.  There  were  only  two  purchasers  willing  to 
pay  sufficient  cash  for  the  agency  to  yield  a  fair  price  for  it, 
although  offers  of  paying  over  a  certain  part  of  the  commission 
from  each  risk  renewed  were  put  in.  At  last  a  realization  of  the 
value  of  the  investment  led  one  concern  to  pay  in  cash  two  and  a 
half  times  the  annual  income. 

In  another  case,  where  the  annual  commission  income  of  the 
agency  was  $4,000  per  annum,  it  was  difficult  to  find  a  purchaser 
at  any  fair  price.  Finally  in  this  case  I  think  one  and  a  half 
times  the  annual  income  w-as  paid,  although  a  fair  proposition 
would  have  been  twice  the  annual  income. 

The  total  number  of  companies  for  an  agent  to  have  in  his 
agency  must  be  governed  entirely  by  the  requirements  of  his  office, 
bearing  in  mind  that  every  company  represented  in  his  agency 
is  entitled  to  a  fair  share  of  the  business,  and  if  this  is  to  be 
limited  in  amount,  fewer  companies  should  be  taken,  because  a 
company  appointing  a  local  agent  desires  and  is  entitled  to  a 
share  of  the  average  business  of  the  community.  This  imposes 
conservative  action  upon  the  agent  in  his  taking  of  companies. 
Well  satisfied  companies  give  the  greatest  accommodation. 

The  proper  conduct  of  the  "inside  work"  of  an  agency  may   Inside  Work, 
be  summed    up  as    follows:   The  services  of   a   clerk  with  regular 
office  hours,  or  a  designation  of  hours  when  the  principal  may  be 
found.      The  need  of   a   telephone,  typewriter  and   Sanborn  map. 


458 


LECTURES  ON  FERE  INSURANCE 


A   fixed  method  of   transacting  the  details  of  the  agencv,  such  as 
making  the  reports  to   the  companies,  and   monthly  accounts,  and 
a  fixed  method  of  liquidation  of  agency  balances. 
Outside  To  successfully  prosecute   his   business,  an  agent    must   have 

Work.  energy,  enthusiasm  and   initiative,  and  should  spend  considerable 

time  outside  of  his  ofiice  in  personal  solicitation  augmented  by 
judicious  advertising  of  the  facilities  he  has  to  offer  in  the  busi- 
ness of  insurance.  How  he  can  be  of  value  to  his  patrons,  of 
course,  depends  upon  the  amount  of  knowledge  he  has  acquired 
in  the  work  through  associations  and  memberships  in  the  local 
boards,  through  which  medium  rating  and  inspection  of  risks  are 
generally  taken  up,  thus  affording  the  agent  the  opportunity  of 
intimate  knowledge  and  close  association  with  these  important 
factors.  A  detailed  knowledge  of  the  literature,  rules  and  forms 
presented  by  these  associations  should  be  had  by  the  agent,  that 
he  may  be  prepared  to  meet  the  questions  of  his  prospective 
customers,  and  at  the  same  time  demonstrate  the  advantages  of 
his  assistance. 
Continued  Any  agency,  sooner  or  later,  will   be  confronted  with  a  natu- 

Efficiency.  ral  loss  of  expirations.  There  are  many  contributory  features. 
The  agent  may  be  of  a  generation  not  particularly  in  touch  with 
present  affairs.  Loss  of  business  may  result  from  removals  from 
the  community.  The  possible  change  of  lines  from  one  agency 
to  another  verv  often  happens  for  some  reason  or  other.  The 
reduction  of  income  as  the  result  of  reduction  in  rates  through  the 
installation  of  protective  devices,  etc.  This  immediately  brings 
to  the  agent's  attention  the  loss  of  premium  income.  This  natural 
loss  must  be  met  with  the  income  from  new  business,  and  this 
means  constant  work.  Very  often  this  is  augmented  by  the  taking 
of  a  partner  in  touch  with  the  existing  affairs,  the  fusion  of 
interests  resulting  in  continued  efficiency. 

It  is  well  that  an  agent  should  at  all  times  retain  his  activity 
in  board  and  supervising  body  affairs,  thereby  promoting  the 
mutuality  of  the  interest,  and  co-operating  to  the  fullest  extent. 
It  is  very  important  that  he  be  active  in  local  affairs  and  in  touch 
with  the  leading  men  and  institutions  of  the  community.  Remem- 
ber the  sources  of  the  business.  The  mortgagee  lending  on  real 
estate  is  very  solicitous  to  make  sure  that  there  is  a  fire  insurance 
policy  for  his  collateral  security.  A  mercantile  house  in  extend- 
ing credit  to  its  trade  pays  particular  attention  to  its  cus- 
tomer's insurance  agrainst  fire.      In  financing  large  manufacturing 


OFFICE  ORGANIZATION  AND  MANAGEMENT  459 


properties,  where  bonds  are  issued,  it  is  a  condition  of  the  trust 
that  the  property  be  covered  by  fire  insurance — another  evidence 
of  collateral  security.  The  grower  of  crops,  who  is  called  upon 
to  make  large  outlays  of  money  during  the  season,  goes  to  his 
bank  for  accommodation,  and  leaves  as  security  his  warehouse 
receipts  and  a  fire  insurance  policy.  This  is  all  evidence  of  the 
greatness  of  our  far-reaching  business. 

In  the  solicitation  of  business,  the  agent  will,  no  doubt,  hear 
of  the  advisability  of  municipalities  and  the  state  granting  insur- 
ance within  their  limits.  A  reply  to  this  suggestion  made  by 
Governor  Pardee  of  California  at  the  time  of  the  San  Francisco 
fire  would  seem  to  give  forcibly  the  reasons  why  this  should  not 
be  practiced,  except  through  the  medium  of  corporate  insurance: — 

"I  am  in  receipt  of  your  letter  of  June  20th,  and 
thank  you  therefor.  No  doubt  there  are  a  good  many 
persons  who  think  as  you  do,  that  insurance  business 
might  very  well  be  carried  on  by  the  state,  but  you  will 
probably  admit  that  after  all  it  is  a  very  risky  business, 
and  that  it  is  fortunate  the  state  was  not  the  insurer  of 
property  in  San  Francisco  at  the  time  of  the  great  fire. 
Just  consider  for  a  moment  what  the  situation  would  be 
now  if  all  the  destroyed  buildings  had  to  be  covered  by 
insurance  issued  by  the  state.  The  loss  is  estimated  at 
$500,000,000  or  more,  and  the  amount  of  insurance 
carried  was  somewhere  between  $200,000,000  and 
$250,000,000.  Now,  the  assessed  valuation  of  all  im- 
provements in  the  state  has  usually  been  about 
$550,000,000.  Assuming  that  $350,000,000  of  this 
amount  represented  improvements  destroyed  in  San 
Francisco,  that  would  leave  $200,000,000"^  of  assessed 
valuation  of  improvements  in  other  parts  of  the  state. 
So,  if  the  state  had  been  carrying  $200,000,000  of  insur- 
ance on  property  destroyed  in  San  Francisco,  the  owners 
of  improvements  in  other  counties,  if  called  upon  to  foot 
the  bill,  would  have  been  compelled  to  pay  an  amount 
equal  to  the  total  assessed  valuation  of  their  property. 
Of  course,  this  would  have  meant  practical  bankruptcy 
for  the  whole  state.  I  think  you  will  agree  with  me  that 
the  fundamental  principle  of  insurance  is  distributing 
the  risk,  and  that  no  government,  whether  city,  county 
or  state,  could  afford  to  become  the  insurer  of  all  the 
property  within  its  boundaries." 

The  writer  knows  of  no  better  investment  than  the  purchase 
of  a  local  insurance  agency,  of  no  purchase  where  the  income 
is    so    great   in   proportion   to  the   price    paid.       The   ownership 


460  LECTURES  ON  FIRE  INSURANCE 


Conclusion,  of  such  an  agency,  however,  brings  many  responsibilities,  and  the 
agent  fails  unless  he  can  get  the  concept  of  the  "mutuality  of 
interest."  Pie  must  strive  for  the  best  interests  of  all.  He  must 
seek  a  fair  rate  of  premium  which  will  give  him  a  proper  reward 
for  his  work  and  yield  his  companies  a  reasonable  profit.  He 
must  co-operate  in  lessening  the  fire  hazard  by  making  inspec- 
tions, asking  improvements  of  risks,  and  by  urging  better  con- 
struction, better  building  laws,  sufficient  fire  apparatus  and 
adequate  water  supplies.  He  can,  by  co-operation,  convince  mem- 
bers of  the  Legislature  that  the  burden  of  laws  against  insurance 
companies,  which  serve  to  increase  the  cost  of  the  business,  are 
in  the  end  always  paid  for  by  the  people.  By  the  reduction  of 
the  fire  and  expense  loss,  local  agents  can  secure  for  their  patrons 
such  marked  reductions  in  insurance  rates  that  they  may  come  to 
be  regarded  not  as  "middlemen"  but  as  indispensable  assets  of 
their  community. 


QUESTIONS 

1.  Why    is    capital    desirable    in    establishing    a    successful 
insurance  agency? 

2.  What   method  would  you  pursue  in  securing  a  list   of  de- 
sirable companies? 

3.  How  would  you  determine  the  value  of  an  agency? 

4.  What   qualities,  in   your   judgment,  may   be   regarded   as 
indispensable  in  the  successful  insurance  agent? 

5.  What   method   would    you    adopt   to    ensure    a    continued 
increase  in  business  to  offset  losses  of  expirations? 

6.  What   advantages   to   the  agent,  in   your   judgment,  result 
from : — 

(a)  Affiliation  with  and  activity  in  local  boards  and  sim- 
ilar supervisory  organizations? 

[/))  Participation  in  civic  and  social  activities  in  his 
own  community  ? 


INDEX, 


ACCOUNTING  by  broker,  407. 

systems  in  a  local  agency,  438. 

Accuracy,  Importance  of  in  local  agency,  440. 

Acetylene,  apparatus,  46:  dissolved,  48;  generators,  46-48;  how  made,  45; 
liquid,  49;   rules  for  storage  of,  45-46. 

Additional  insurance  by  another  agent,  392. 

Additions  and  alterations,  294. 

Adequacy  of  rates,  136-137. 

"  Adjoining  and  communicating,"  294. 

Advertising,  What  must  appear  on  insurance  company,  415. 

Aero  thermostat,  210-211. 

Agency,  Books  of  to  be  open  to  inspection  of  tax  commissioner,  428  ;  of  broker, 
405  ;  common  law  of,  389-411  ;  how  to  value  an  insurance,  456-457  ;  law  of, 
410,  411,  431  ;  Massachusetts,  common  law  of,  411-432  ;  termination  of, 
404-405  ;  organization  and  management  of  an  insurance,  387-432. 

Agent,  422;  acts  of,  390;  bankruptcy  of,  427;  broker  and,  405  ;  company 
bound  by  acts  of,  394-396  ;  company  entitled  to  premiums  collected  by,  427; 
compensation  of,  442-453  ;  corporation  may  not  be  licensed  as,  414  ;  defini- 
tion of,  389  ;  definition  of  by  statute,  416  ;  of  Foreign  company,  How  ap- 
pointed, 413;  fraud  of,  402-403;  knowledge  of,  396;  negligence  of,  402- 
403  ;  penalty  for  failure  of  to  pay  over  premiums  collected  to  company, 
426;  penalties  for  acting  as,  without  a  license,  426;  personal  liability  of, 
401-402  ;  powers  of,  399-400  ;  rights,  duties  and  liabilities  of,  392-396  ;  the 
agent  of  the  insurer,  392  ;  who  may  be,  389-390. 

Agent's  authority.  Certificate  of,  414;  license  personal,  414  ;  license.  Renewal 
of,  413  ;   license.  Revocation  of,  413. 

Agreement,  Commission,  446-449. 

Alcohol,  163. 

Alienation  clause,  338. 

American  Institute  of  Architects,  11. 

American  Institute  of  Electrical  Engineers,  11. 

American  Society  of  Mechanical  Engineers,  11. 

Ameri-  an  Street  Railway  Association,  11. 

Ameruan  Thermostat,  206. 

Analytical  system  for  measurement  of  fire  hazard,  142. 

Annual  returns  of  insurance  companies,  429. 

Annual  statement  to  be  filed,  429. 

Apparent  authority  of  agent,  396-398. 

"  Arc  "  formation  as  cause  of  fire,  5. 

Arc  lamps.  Low  potential  circuits,  28. 

.Artificial  refrigeration.  Clause  to  cover,  351-352. 

Artificial  ventilation,  59. 

Ashes,  Fire  hazards  of,  77,  79,  80. 

Assessments,  Guarantees  against,  412-413. 

Assets,  Advertising  use  of,  415. 

Attempts  to  defraud,  341. 

Authority  of  agent,  396-398  ;  ostensible,  400-401  ;  form  of  agent's  certificate  of, 
398-399. 

Automatic  Cut-outs,  24-25. 

Automatic  fire  alarms,  157  ;  202-214  ;   watchmen  versus,  189-190. 

Automatic  pumps,  243-245. 

Automatic  sprinklers,  157-158  ;  warranty  for,  355-356. 

Automobile  fire  apparatus,  222-224. 

Automobiles,  Gasolene  clause  for,  354. 

Average  clause  defined,  367-368  ;  form  for,  370  ;   reduced  rate,  331. 

Average  rate,  126. 


462  LECTURES  ON  FIRE  INSURANCE 


B 

BALTIMORE  CONFLAGRATION,  How  gases  spread  fire  in,  160-161. 

Bankruptcy  of  insurance  agent,  Proceedings  in,  427. 

Barbon,  Dr.  Nicolas,  129. 

Base  rate,  127. 

Battery  wagons,  222. 

Battilana,  Frank  H.,  Office  organization  and  management,  454-460. 

Beardsley,  E.  W.,  Local  agency  office  systems  and  accounts,  433-441. 

Belt  box  hazard,  70. 

Betterment  permit,  346. 

Bibliography:  Common  fire  hazards,  93-94  ;  electrical  fire  hazards,  35  ;  fire  de- 
partments, 226  ;  fire  pails  and  extinguishers,  180  ;  fire  prevention  theory  and 
chemistry  of  fire,  166;  law  of  agency,  432;  local  agency  compensation,  452- 
453;  ofiice  systems,  441 ;  pails  and  chemical  extinguishers,  179-180  ;  policy 
clauses  and  forms,  273-385;  pumps,  247;  rates  and  rate  making,  152-153  ; 
shoe  factories,  120;  standpipes  and  meters,  hose,  188;  thermostat  systems, 
214;  watchmen's  service,  201  ;  waterworks,  260. 

Binders,  361-365. 

Blanket  insurance  defined,  285  ;  blanket  rate,  126. 

Blanks,  Inspection  report,  199-200;  fire  underwriters'  Uniformity  Association, 
199-200  ;  what  blanks  should  cover,  200. 

Blaugas,  Description  of,  51  ;  cylinders  for  the  storage  of,  51-52  ;  safeguards  for 
handling  of,  52. 

Blower  systems  in  shoe  factories,  114. 

Blowers,  fire  hazards  of,  60. 

Blowing,  Fire  Extinguishment  by,  165. 

Boiler  shells,  71 

Boilers,  Low  pressure,  57;  steam  fire  engine,  218;  hazards  of,  78-75;  flue,  72; 
high  pressure,  71;  locomotive,  71;  tubular,  71;  vertical,  72;  water  tube,  73. 

Boiler  room,  Percentage  of  fires  originating  in,  in  shoe  factories,  117. 

Bombardment  insurance,  424. 

Boot  and  shoe  factories,  processes  and  fire  hazards. 

Boston  Board  of  Fire  Underwriters  organized,  134. 

Boston  Manufacturers'  Mutual  Fire  Insurance  Company,  Circular  re  electrical 
fire  hazard,  11;  sprinkler  leakage  form  in  use  by,  314-315. 

Bottoming  department,  shoe  factories,  102. 

Brockton,  Mass.,  Manufacture  of  shoes  in,  95;  types  of  shoe  factory  construction 
in,  95. 

Broker,  accounting  by,  407;  acts  outside  authority  of,  408;  agency  of,  406;  appli- 
cation for  license  as,  423;  comparison  between,  and  agent,  405-406;  defini- 
tion of,  404-405,  422-423;  exemption  from  fees  for  license  as,  424;  license  of, 
423;  qualifications  for,  423;  revocation  of  license  of,  424. 

Broker's  clerk,  406;  duties  and  liabilities,  409-410. 

Buckets,  Old  fashioned  fire,  166;  modern,  166. 

Buffing,  Shoe  manufacturing,  104. 

Burning  point  defined,  159. 


CALCIUM    CHLORIDE    as  freezing  preventative,  179. 

Cancel,  How  orders  to  must  be  given,  394-396. 

Cancellation,  408. 

Candles,  Fire  Hazards  of,  39-40. 

Cans  for  safe  handling  of  rubber  cement,  107. 

Capital,  Necessity  for  in  starting  local  agency,  455. 

Car  Houses  and  Shops,  Wiring  for,  31. 

Carbon  tetrachloride,  165. 

Carbonic  acid  gas.  Fire  extinguishment  by,  165. 

Carburetter,  Use  of  in  shoe  factories,  112. 

Carriers  liability.     See  Common  Carriers. 


INDEX  463 


Causes  of  Fires,  Boot  and  shoe  factories,  115-116;  Common,  37-94;  Electrical,  4-5. 

Cease  operation  permit,  387. 

Celluloid,  163. 

Cement  houses,  in  shoe  factories.     To  be  constructed  how,  106. 

Centra!  station  alarm  systems,  196-197. 

Centrifugal  tire  pumps,  228,  239-242. 

Certificate  of  agent's  authority,  398-399;  form  of,  414. 

Charcoal,  Fire  hazards  of,  78-79, 

Chemical  Extinguishers,  care  of,  177;  Classes  of,  167-176;  Cylinders  for,  177; 
deterioration,  173;  tanks,  177;  how  charged,  174;  inspection  of,  177;  limita- 
tions on  for  fire  extinguishment,  176-177. 

Chemical  Extinguishers  (2)  principal  makers  of,  174-176;  stationary',  177-178. 

Chemical  Fire  Engines,  218-219;  pails,  168. 

Chemistry  of  fire.  Questions  on,  165-166. 

Chief's  Wagons,  222. 

Chimneys,  Construction  of,  61-62. 

Cinders,  Fire  Hazards  of,  79-80. 

Classification,  129,  130,  132;  133;  inadequacy  of  data  for,  137-138. 

Clauses,  acetylene  gas,  353;  alienation,  338;  classification  of,  278;  co-insurance 
367-379;  cold  storage,  351-352;  contribution,  359;  dangerous  materials,  341 
definition  of,  277-278;  earthquake,  362;  exemption  and  warrant,  348-365 
explosion,  364-365;  fallen  buildings,  363-364;  fire  insurance,  273;  green- 
house, 352;  location,  293-296;  loss  payable,  358;  mortgage,  358-359;  per- 
mission, 332;  phrases  that  breed  trouble  in,  288-289;  reduced  rate  average, 
331;  spontaneous  combustion,  348-349;  subrogation,  361;  three  fourths  loss, 
367;  three  fourths  value,  366-367;  title  and  insurable  interest,  357-361; 
warrant,  353;  where  needed,  343;  clauses  which  may  be  waived,  335-336; 
clauses  which  may  not  be  waived,  334-335.     See  also  Forms,  Permits. 

Cleanliness,  Necessity  for  in  shoe  factories,  115. 

Clocks,  Portable,  193-195;   stationary,  195-196. 

Cloth  signs.  Fire  hazards  of,  89. 

Coal,  spontaneous  combustion  clause  used  in  insuring,  348,  spontaneous  heating 
of  in  storage,  77-78. 

Co-insurance  clause,  367-368;  discussion  of  by  students  at  Harvard,  374-378; 
essential  features  of,  370-374;  operation  of,  378;  necessity  for,  136;  five  per- 
cent provisions  of,  372. 

Cold  storage  clause,  351-352. 

Cold  storage  plants,  350-351, 

Collections  and  remittances,  438-440. 

Combination  heating  and  ventilating  systems,  59. 

Combination  wagons,  fire,  219. 

Combustible,  material,  158-159  ;  solids  of  organic  origin,  159. 

Combustibility,  Relative,  162-163. 

Combustion,  Complete,  162. 

Combustion,   relative,  162. 

Combustion  point  defined,  160. 

Commission  agreement,  Forms  of,  446-449  ;  clause,  290-292. 

Commissions,  Fire  insurance,  442-453  ;  forms  of  agreement,  446-449  ;  methods 
of  computing,  445-446  ;   parties  interested  in,  444. 

Committee  rates,  127. 

Common  Carriers,  323-326;  liability,  326-328;   liability  forms,  324-328;  329-330. 

Common  Fire  Hazards,  37-94;  bibliography,  93-94;  defined,  37:  questions  on, 
91;  common  fire  hazards  and  special  fire  hazards  compared,  38. 

Common  law  of  agency,  389-411. 

Company,  what  may  appear  in  advertising  of,  415;  to  file  annual  report  of  con- 
dition, 429;  not  to  deprive  courts  of  jurisdiction,  421;  to  do  business  in  own 
name,  419;  salaries  of  officers  of,  412;  policies  to  be  headed  how,  419;  how 
to  obtain  in  local  agency,  455-456. 

Company  register,  434. 

Companies,  How  to  get  them,  455-456. 

Compensation,  Agent's  right  to,  392;   notes  on,  442-453;  systems,  445. 


464  LECTURES  ON  FIRE  INSURANCE 


Complete  combustion,  162. 
Compound  insurance  defined,  285. 
Concealment,  336. 

Conditions  of  policy  to  be  stated  in  full,  419. 

Conductors,  12;   Electrical,  relative  conductivity  of,  7;   underground,  23. 
Consequential  damage,  350-352. 
Consistency  of  rates,  136,  139. 

Constant  current  systems,  24;   potential  systems,  9,  24. 
"  Contained  in,"  295. 

Contents  of  mercantile  buildings.  How  divided,  147. 
Contingent  Commissions,  445-446. 
Contract  of  insurance  defined,  416. 
Contracts,  Commission,  446-449. 
Contribution  Clause,  359. 
Cork,  Its  use  in  manufacture  of  shoes,  102. 

Corporation  acts  by  agent,  390;  may  not  be  licensed  as  agent,  414. 
Cost  of  an  agency,  456-457. 

Count  von  Oldenberg,  Insurance  plan  proposed  by,  128. 
Counters  of  shoes,  how  made,  102- 

Couplings,  221.  ,        •     ,    ,  ■    -, 

Current,  Alternating,  defined,  6;   direct,  6;  electrical,  how  measured,  7. 
Cut-out,  Automatic,  24-25;   definition  of,  8. 
Cutting  board  scrapings.  Hazards  of  in  shoe  factories,  110-111. 
Cutting  room  in  shoe  factories,  100;  causes  of  fire  in,  110-111;   percentage  of  fire 
originating  in,  117. 

D 

DANA,   GORHAM:  Theory  of  fire  protection  and  chemistry  of  fire,  157-166; 

Paiis  and    chemical  extinguishers,    166-180;  standpipes    and    hose— meters, 

180-188;    watchmen's    service— self  inspection— private  fire    brigades,    189- 

201;   automatic  alarms,  202-214;  fire  departments,  215-226.- 

Dangerous  material  clause,  341. 

Dean,  A.  F.,  125;   Analytic  schedule  for  rating  of  fire  risks,  142-143;  on  need  ot 

classification  in  fire  insurance,  138. 
Definitions:  Agent,  389;  alternating  current,  6;  broker,  404;  burning  point, 
159-160;  combustible  material,  158-159;  combustion,  complete,  162;  com- 
bustion point,  160;  combustion  relative,  162;  constant  current  system,  9; 
constant  potential  systems,  9;  Cut-out,  8;  difference  of  potential,  7;  Electri- 
cal, 6-10;  fire,  158;  flame,  161;  flash  point,  159;  ground,  8;  ignition  point, 
160;  multiple  connection,  8;  oxygen,  159;  power,  8;  rates  and  rate  making, 
125-127;  resistance,  7;  series  connection,  8;  short  circuit,  9;  shunt,  8;  three 
w'ire  system  defined,  9;  two  wire  system  defined,  9;  thermostat,  202;  trans- 
former, 9;  voltage,  7. 

Denatured  alcohol,  as  freezing  preventive,  179. 

Department  stores.  Fire  drills  in,  201. 

Detector  meters,  185-187.  . 

Deterioration  of  chemical  extinguishers,  173:  of  water  pipes  2.3/. 

Difference  of  potential,  defined,  7. 

Dip  black,  see  Naphtha  black. 

Direct  Current,  defined,  6. 

Direct  pumping  systems,  251-252. 

Distributing  systems  for  water  supply,  253-2.")9. 

Distribution  of  burden  of  fire  loss,  136. 

Dry  powder  extinguishers,  167-168. 

Dutch  ovens,  73. 

Duties  of  agent,  393-395;  of  brokers,  409-410. 

Dynamo  rooms.  Electric  rules  for,  12-13. 

Dwelling  house  warranties,  355. 


INDEX  465 


EARTHQUAKE    CLAUSES,  362;   dirticiilty  of  adjustments  under,  363. 

Electric  cranes,  32;   heaters,  26;   power,  69;   power  transmission  hazards,  69-70. 

Electrical,  equipment  warranties,  356;  fire  hazards,  3-35;  fire  hazards  bibliogra- 
phy, 35;  fire  hazards  questions,  34;  fittings,  32;  heating  apparatus,  61;  in- 
spection, 3;   rules,  11. 

Electricity,  Advantages  of  for  light,  heat  and  power,  3;  fire  hazards,  43;  how 
fires  are  caused  by,  4. 

Electrolysis,  19. 

Engines,  Fire,  215-224;  fuel  oil,  65;  gas,  63;   gasolene,  64-65. 

Equalizers,  Electrical,  15. 

Estoppel,  332-334. 

"Etc.,"  Dangers  of  in  policy  writing,  292. 

Examination  of  companies,  429-430. 

Excess  policy  defined,  286;   floater  insurance,  330-331. 

Excess  premiums  paid  by  insured,  418. 

Excessive  risk  outside  of  state,  416-417. 

Expenses,  Commissions  and,  444. 

Expiration  Cards,  436-437. 

"  Explosions  "  clause,  364-365. 

Explosives,  Use  and  storage  of,  82. 

Expositions,  Use  and  occupancy  form  for,  308-310. 

Exposure  Charges,  Importance  of,  145;  fires,  161. 

Extinguishment  of  fire.  Methods  of,  163. 

Extra  hour  permits,  347. 


FACTORY    MUTUAL  FIRE    INSURANCE    COMPANIES,  11. 

Fairness  of  rates,  136-137. 

Fairs,  Use  and  Occupancy  form  for,  308-310. 

Fall,  fire  hazards  peculiar  to,  88. 

Fallen  Buildings  Clause,  363-364. 

False  entries  upon  books,  etc.  ,  Penalty  for,  428;  statements,  428. 

Filing  methods,  438. 

Finishing  department,  Shoe  factories,  104;  naphtha  used  in,  109;  special  fire 
hazards  of,  113-114. 

Fire,  Definition  of,  158;   spread  of,  160-161. 

Fire  alarms,  157;  automatic,  202-214;  boxes,  264-265;  boxes,  location  of,  266- 
267;  boxes,  wiring  for,  267-268;  headquarters,  267;  watchmen  z's.  auto- 
matic, 189-190. 

Fire  alarm  systems,  for  coal  in  storage,  78;   municipal,  261-271. 

Fire  boats,  219. 

Fire  brigades.  Early,  215;   private,  200. 

Fire  departments,  215-226;  bibliography,  226;  cost  of,  225;  questions,  226; 
supervision,  225;  types  of  organization,  224-225. 

Fire  drills.  Need  of,  201. 

Fire  engines,  automobile,  224;  chemical,  218-219;  hand,  215;  horseless,  218; 
steam,  215-218. 

Fire  extinguishers,  Bibliography  of,  180;  chemicals  used  in,  170. 

Fire  extinguishment,  theory  of,  157;  blowing,  165;  carbonic  acid  gas  165; 
principal  methodsof,  163;   salt  water,  164;  smothering,  165;   water,  163-164. 

Fire  extinguishment  of  gas  fires,  161. 

Fire  hazard.  Its  bearing  on  rates,  137;  schedules  not  an  exact  measure  of.  147. 

Fire  hazards.  Acetylene,  44-49;  ashes,  77,  79-80;  belt  boxes,  70;  belting,  70; 
blowers  in  heating  systems,  60;  boilers,  72,  74-75;  candles,  39-40;  careless- 
ness, 88;  charcoal,  78-79;  electric  power  transmission,  69  ;  electrical  heating 
systems,  61;  fire  places,  53;  floor  oils,  81;  fuels,  77;  fumigating,  90;  gas 
engines,  63  ;  gas  lighting,  41;  gas  stoves    55;  gasolene  lighting  systems,  49- 


466  LECTURES  ON   FIRE  INSURANCE 


51;  gasolene  stoves,  55;  hot  air  ducts,  56;  hot  air  registers,  56;  hot  water  heating 
systems,  56-57;  incandescent  lamps,  44;  incendiarism,  86-87;  kerosene  oil, 
41-43;  kerosene  oil  heating  and  cooking  stoves,  54;  Kerosene  oil  pressure 
systems,  43;  kerosene  oil  pressure  stoves,  55;  lanterns,  43;  locomotive 
sparks,  84-85;  matches,  83;  moral  hazard,  90;  oily  waste,  80-81 ;  power, 
63-71;  pressure  gas  systems,  69;  producer  gas  systems,  68;  rubber  cement, 
106-107;  sawdust,  81;  seasonal  hazards,  88;  shafting  70;  shoe  factories,  95- 
122;  smoke  stacks,  76;  shoe  manufacturing,  104;  steam  heating,  57-59; 
steam  pipes,  58-59;  steam  power,  63  ;  stovepipes,  54;  stoves,  53;  sweepings, 
80;  sweeping  compounds,  81;  torches,  40. 

Fire  insurance  a  necessity,  135;  contract  one  of  indemnity,  282. 

Fire  pails,  Bibliography  of,  180. 

Fireplaces,  Fire  hazards  of  53. 

Fire  prevention.  Bibliography  of  166. 

Fire  Protection,  155-272;  branches  of,  157;  definition  of,  157;  of  steam  pipes, 
58-59;   questions  on  theory  of,  165-166. 

Fire  pumps,  227-247;  centrifugal,  228,  239-242;  electric,  242-243;  history  of, 
228-229;  power,  228;  rotary,  228-230,  236-239;  steam,  228-247;  suction 
pipes  for,  231;  national  standard,  232-236;    Underivriter,  the,  229. 

Fire-S-Co  fire  extinguisher,  170. 

Fire  service  supplies.  Rules  governing,  250. 

Fire  tanks  with  pails  inside,  169-170. 

Fire  Underwriters  Uniformity  Association,  199. 

Fires,  Easily  extinguishable  in  beginning,  158;  location  of  in  shoe  factories,  115- 
116. 

Fitting  room,  Shoe  factories,  100;  percentage  of  shoe  factory  fires  originating  in, 
117;  special  hazards  of,  111. 

Fixture  Wiring,  28. 

Flame  defined,  161. 

Flash  point  defined,  159. 

Flat  Commissions,  445-446. 

Flat  rate,  126. 

Flexible  Cord,  28. 

Floater  insurance.  Excess,  330-331. 

Floating  policy,  285;   main  objections  to,  323. 

Floor  oils,  Fire  hazards  of,  81. 

Flow  of  water  in  pipes,  256. 

Flue  boilers,  72. 

Flues,  construction  of,  61-62. 

Flying  squadrons,  222. 

Forbush,  Gayle  T.:  Notes  on  rates  and  rate  making,  125-154:  notes  on  local 
agency  compensation,  442-453. 

Forbush,  F.  M.:   Common  and  statute  law  of  agency,  387-432. 

Foreign  Company,  Agent  of  to  make  returns  to  tax  commissioner,  427;  agents  for, 
413-414. 

Form  of  commission  agreement,  446-449. 

Forms,  278;  average  clause,  370;  common  carriers'  liability,  324-328;  con- 
sequential damages,  351;  covering  materials,  288-289;  definition  of,  277; 
extended  area,  317-331;  fioater,  317;  leasehold,  306,  311-312;  location, 
296;  mortgage,  358-359;  necessity  for  care  In  drafting,  286-287;  profit  in- 
surance, 312;  property  description  and  location,  284-297;  rent  insurance, 
305,  310-311;  sprinkler  leakage,  314-316;  three-fourths  value,  366;  use  and 
occupancy,  308,  310;  tourist,  318-320.  See  also  Clauses,  Permits,  Policy 
clauses  and  forms.  Forms  and  clauses,  etc. 

Forms  and  Clauses,  fire  insurance,  273;  difference  between,  277-278;  Authorities 
cited,  277;   relation  of  to  standard  policy,  275-276. 

Fourth  of  July  fire  hazards,  88. 

Fraud  of  agent,  402-403. 

Fraudulent  representation,  422. 

Friction  losses  in  water  pipes,  256-257. 

Fuel,  Fire  hazards  of,  77-80;   Fuel  oil  engines,  65. 


INDEX  467 


Fuel  wagons,  222. 

Fuels  used  in  suction-producer  gas  plants,  68. 

Fumigation,  Fire  hazards  of,  90. 

Q 

GAMEWELL  fire  alarm  gong  and  indicator,  263. 

Gas-fires,  extinguishment  of,  161;  regulator,  64;   stoves,  55. 

Gas  lighting.  Early  history  of,  40;  hazards  of,  40;  methods  of  use,  40-41;  pro- 
tection against,  41-43. 

Gasolene,  163;  engines,  64-65;  handling  of,  82;  lighting  systems,  49-51;  stoves 
for  cooking  and  heating,  55;   permission  to  keep,  342;   permits  for  use  of,  354. 

General  Agent,  391;   authority  of,  397-398. 

General  register,  described,  434. 

Generators,  Electrical,  14. 

Glycerine,  as  freezing  preventive,  179. 

Goddard,  C.  M.,  and  electrical  rules,  11. 

Goodyear  welt.  Process  described,  99. 

Government  supervision  of  agents,  411-412. 

Graded  Commissions,  445;  agreement  form  for  payment  of,  448-449;  objections 
to,  450-451. 

Gravity  water  systems,  250-251;  gravity  and  direct  pumping  systems  compared, 
252-253. 

Gridiron  systems,  water  supply,  257-258. 

Ground  leather,  Use  of  in  shoe  manufacturing,  109. 

Ground,   Electrical,  defined,  8. 

Grounding  of  secondary  circuits,  20. 

H 

HAND  ENGINES,  Early,  215;  grenades,  168. 

"  Hand-in-Hand,"  130. 

Hard  Coal,  163. 

Hartford  Fire  Insurance  Co.,  132. 

Haverhill,  Types  of  shoe  factory  construction  in,  95. 

Heat,  162. 

Heat  alarm  thermostat,  206. 

Heating — Direct  and  indirect  systems,  59-60;  electrical,  61;  shoe  factory  heating, 

97. 
Heating  tools,  in  shoe  factories,  114. 

Heating  and  Ventilating  systems;    Combination,  59;   fire  hazards  of,  52-62. 
Heels  of  shoes.  How  made,  100. 
"  Held  in  Trust,"  in  fire  policies,  290-292. 
Hersey  detector  meter,  186-187;  thermostat,  207. 
High  pressure  boilers,  71. 
High  pressure  fire  systems,  258-259. 
High  tension  lines,  20. 
History:   Electrical  code,  11;   Rate  making,  128-134:  steam  fire  engine,  215-218; 

steam  fire  pumps,  228-229. 
Holiday,  fire  hazards,  88. 
Horseless  fire  engines,  218. 

Hose,  181-182,  220;   questions,  187;   streams,  161;  valves,  183,  wagons,  220. 
Hot  air  ducts.  Fire  Hazards  of,  56;  furnaces,  56;   registers,  56. 
Hot  water  heating  systems,  Fire  hazards  of,  56-57. 
Hydrants,  255;  roof  hydrants,  183. 


I 


IGNITION  POINT  defined,  160. 

Improvement  permit,  346. 

Incandescent  lamps,  Fire  hazards  of,  44. 


468  LECTURES  ON  FIRE  INSURANCE 


Incendiarism,  Prevalence  of,  86-87. 
Increase  of  risk,  337-338. 
Independent  rates,  127. 
Inflammables,  Use  and  storage  of,  82. 
Inside  Electrical  Wiring,  21-29. 

Inspection,  Need  of,  199;  object  of  electrical,  3;  report  blanks  for,  199-200;   self- 
inspection,  199-200. 
Installation,  Chief  requisites  of  safe,  5-6. 
Insulation  resistance,  testing  of,  15. 
Insurance  agents,  See  Agent. 
Insurance  Commissioner  may  examine  companies,  429-430. 


JAMAICA  earthquake,  362-363. 
Judgment  rate,  127. 


K 


KANSAS  CITY,  Mo.,  Fire  Alarm  Systems  in,  261-262. 

Kerosene  Oil — Heating  and  cooking  stoves,  54;   lighting,  41-43;   pressure  sto\es, 

55. 
Key  rate,  127. 


LADDER  TRUCKS,  222. 

Lanterns,  fire  hazards  of,  43;   watchmen's,  192-193. 

Lasts,  Shoe  factory,  96. 

Law   of    Agency,  387-432.     Bibliography,  432;     questions    on,  410,    411,    431; 

statute  vs.  common,  411. 
Leased  land.  Buildings  on,  360-361;   policy  voided  by,  343. 
Leasehold  insurance,  306;  forms,  306,   311-312. 
Ledger  Card,  438. 

Liabilities  must  appear  with  assets  in  advertising,  415. 
Liability  of  agent  to  company,  393-395;   personal,  401-402. 
Licenses,    Brokers,  423;   renewal  of  agents;  413;   revocation  of    agents,  413;  to 

procure  unauthorized  company  insurance,  424-425. 
Light,  162. 
Lighting — Fire  hazards    due    to,  39-52;  systems  in  shoe  factories,  97;   lighting 

and  power  from  railway  wires,  31. 
Lightning,  85-86;   arrestors,  15;  fire  hazards,  85;   rods,  85. 
Limitation  of  risk,  416. 
Liquid  extinguishers,  167-176. 
Little  Giant  fire  extinguisher,  171. 
Local  agency-compensation,  442-453;   bibliography,  452-453;   questions  on,  452; 

ortice  systems,  433-441;   bibliography  of  office  systems,  441;   need  of  capital, 

455;  organization  and  management,  387-432. 
Location  of  tires  in  shoe  factories,  115-116. 
Locomotive  boilers,  71;   sparks,  84-85. 
London,  Great  fire  in,  128. 

Loss,  authority  to  receive  notice  of,  396-398:  notification  in  case  of,  419. 
Loss  pavable  clause,  358. 
Lynn,  Mass.,  Types  of  Shoe  factory  construction  in,  95. 


M 


McKAY  shoes.  How  made,  99. 
Maine,  Manufacture  of  shoes  in,  95. 
Malice  as  a  cause  of  fires,  87. 


INDEX  469 


Manchester,  N.  H.,  Manufacturer  of  shoes  in,  95. 

Marine  boilers,  72;   electrical  installations,  33-34;  tourist  forms,  318-319. 

Martin-Wilson   Firm  Alarm  Co.,  202. 

Massachusetts:  Courts  not  to  be  ousted,  421;  manufacture  of  shoes  in,  95;  require- 
ments relative  to  insurance  agents  in,  412;  questions  on  statute  law  of  agency 
in  431-432;  who  are  insurance  agents  in,  391. 

Massachusetts  and  New  York  State  Standard  Policy,  compared,  357-358. 

Massachusetts  Fire  Insurance  Company,  Rates  of  annual  premiums,  130. 

Matches,  Fire  hazards  of,  83. 

Material  facts,  withholding  of,  336. 

"  Materials,"  Forms  to  cover,  289. 

Medlicott,  W.  B.,  Fire  insurance  policy  forms  and  clauses,  273-385. 

Mercantile  buildings.  Contents  of,  how  divided,  147;  schedule  for  rating,  145. 

"  Merchandise  "  forms,  Need  of  care  in  writing,  289-290. 

Mechanics'  permit,  344. 

Meters,  183-187;  bibliography,  188;  detector,  185-187;  objections  to  old  types 
of,  185;  questions,  187;  types  of,  184-185. 

Meyers  pail,  168. 

Middle  Department,  Underwriters'  Association  of,  organized,  134. 

Miller  pail,  168. 

Minimum  rate,  126. 

Misrepresentation,  336,  417. 

Modern  steam  fire  engines,  217. 

Monthly  abstract  card,  438. 

Moral  hazard,  The,  86-87,  90,  307;  of  traveling  property,  322-323. 

Mortgage  form,  358-359;   interests,  358-361. 

Motion  pictures:  films,  tion-in/Ia;n mable,  31\  machines  for,  30-31;  theatre  wir- 
ing for,  29-31. 

Motors,  15-17. 

Multiple  connection,  defined,  8. 

Mutual  Companies,  non-employment  of  officers  of,  418. 

N 

NAPHTHA,  Use  of  in  shoe  factories,  109,  114;  fires  caused  by  in  shoe  factories, 

117;   fumes  of,  109. 
Naphtha  Black,  107;   use  of  in  shoe  factories,  107. 
National  Association  of  Fire  Engineers,  11. 
National  Board  of  Fire  Underwriters,  11,    133;   as  a  rate-making  organization, 

134;   clauses  recommended   by,   343;  commissions  table   compiled  by,  443; 

issues  electrical  rules,  11;   rules  for  private  fire  brigades,  200-201;   rules  for 

pails,  167;   standard  rules  and  requirements,  39. 
National  electrical  code,  First  edition  of,  11;   how  prepared,  10-12;   Class  A,  12- 

18. 
National  Electric  Light  Association,  11. 
National  Fire  Protection  Association  rules,   private  fire   brigades,    200;  electric 

standards,  12. 
National  Standard    Fire  Pump,  Rotary,  242;   steam,  232-236;   rotary,  236-239. 
Neglect  to  cancel.  Liability  of  agent  therefor,  393-394. 
Negligence  of  agent,  402. 
Negotiation  of  insurance  defined,  415-417. 
New  England,  Thermostat  systems  in,  214. 

New  England  Insurance  Exchange,  the,  203;  electrical  rules  issued  by,  11. 
New  York,  132:  great  fire  of  1835  in,  133. 

New  York  Board  of  Underwriters,  Resolution  re  electrical  installations,  10. 
New  York  State,  Underwriters  Association  of,  organized,  134. 
New  York  and  Massachusetts  standard  Fire  policies  compared,  357-358. 
Newark,  N.  J.,  Manufacture  of  shoes  in,  95. 
Non-concurrency,  379. 
Non-freezing  compounds,  178-179. 
Non-occupancy,  339. 


470  LECTURES  ON  FIRE  INSURANCE 


Norwich,  Conn.,  132;   first  local  board  organized  in,  134. 
Notice  of  loss.  Authority  to  receive,  396-398. 
Notification  in  case  of  loss,  419. 


o 

OCCUPANCY,  Use  and,  297-304. 

Occupancy  charges,  147. 

Office  organization  and  management,  454-460;  questions  on,  460. 

Office  systems,  433-434;   bibliography  of,  441. 

Oil  proof.  Use  of  in  shoe  factories,  108. 

Oily  waste.  Fire  hazards  of,  80-81. 

Open  lights.  Fire  dangers  of  in  shoe  factories,  104. 

Open  policy.  Definition  of,  285. 

Ostensible  authority  of  agent,  400-401. 

Other  insurance,  336;   "  other  insurance  permitted,"  327. 

Outside  wiring,  19;   fire  dangers  of,  18-19. 

Overheating  of  electrical  conductors,  4. 

Overtime  operating,  340;  fire  hazards  of,  89;   permits,  347. 

Over-valuation  in  writing  fire  policies,  418. 

Oxidization,  158-159. 

Oxygen  defined,  159. 


PAILS  and  chemical  extinguishers,   166-179:    bibliography,   179-180;   care  of, 

167;  modern,  166;  number  and  arrangement  of,  167. 
Paper  boxes.  Use  of  in  shoe  factories,  96. 
Patterns,  in  shoe  factories,  96. 

Pensions  to  officers,  trustees,  etc.,  of  insurance  companies,  412. 
Permits,    Acetylene  gas,  353;  cease  operation,  347;  demolition,  345;    gasolene, 

342;  mechanics,  344-345;  overtime,  347;   removal,  344;   unoccupancy,  346; 

vacancy,  346.     See  also  Forms,  Clauses,  Policy  Forms  and  Clauses,  etc. 
Personal  liability  of  agent,  401-402. 
Philadelphia  Contributionship,  130. 
Phosphorus,  162. 
Pipes.   Water,  254;  deterioration  of,   257;   distribution    of,  257;   laying  of,  254; 

pressure  and  friction  losses  in,  256-257. 
Play  pipes,  221. 

Police,  Their  part  in  fire  protection,  157. 
Policy  Forms  and  Clauses  273,  380-383;  blanket,   defined,  285;   drafting,   286; 

excess,  286;   floating,  285;   headings,  283;  open  policy,  285;   specific  policy, 

285.     See  also  Clauses,  Forms,  Forms  and  clauses.  Permits. 
Policy,  may  not  be  issued  for  more  than  seven  years,  418. 
Political  contributions  bv  insurance  companies,  418. 
Portable  clocks,  193-195. 
Potential,  Difference  of,  7;   Constant,  9. 
Power,  Electric:   installation  of,  69;   electrical,  defined,  8;    fire  hazards  of,  63- 

71  ;   power  used  in  shoe  factories,  97  ;   railway  stations,  17. 
Power  pumps,  228. 

Powers  of  agents  and  officers  respecting  contracts,  399-400. 
Premiums:   Held  in  trust  when  collected  by  agent,  426;  company  entitled  to  be 

paid  in  full  for,  427;   excess  payment  of  by  assured,  418;  fraud  in  securing 

payment  of,  422. 
Pressure  producer  gas  :   plant  described,  68  ;  fire  hazards  of  systems,  69. 
Principal  bound  by  acts  of  agent,  390. 
Priming  tanks,  232. 

Private  fire  brigades,  200  ;   National  Board  rules  for,  200-201  ;  (juestions  on,  201. 
Processes  employed  in  shoe  factories,  97-100. 
Producer  gas,  65-69  ;  explosions  of,  69  ;   hazards  of,  68  ;   systems,  65. 


INDEX  47J 


Profit  insurance,  29S-312  ;  form  to  be  used  for,  312  ;  profit  insurance  vs.  use  and 
occupancy,  298-299. 

Prohibited  risks,  419. 

Protection  of  steam  pipes,  58. 

Proxies,  When  forbidden,  413. 

Public  -vs.  private  ownership  of  waterworks,  249-250. 

Pumps,  227-247  ;  automatic,  243  ;  auxiliary,  244-245  ;  bibliography,  247  ;  elec- 
trical fire,  242-243;  questions,  246-247;  testing  of,  245-246;  type  of  fire 
extinguisher,  170-172. 

Pyrene  fire  extinguisher,  171. 

Pryromaniac,  The,  87. 


QUALIFICATIONS  for  broker's  license,  423. 

Questions,  Common  fire  hazards,  91-93  ;  fire  departments,  226  ;  electrical  hazards, 
34;  law  of  agency,  410,  431  ;  local  agency  compensation,  452  ;  Massachu- 
setts common  law  of  agency,  431-432  ;  office  organization  and  management, 
460;  policy  clauses  and  forms,  380-383;  pumps,  246-247;  rates  and  rate 
making,  128,  134,  142,  151;  shoe  factories,  119;  standpipes,  hose,  meters, 
187  ;  theory  of  fire  protection  and  chemistry  of  fire,  165-166  ;  thermostat 
systems,  214;  watchmen's  service,  200;  waterworks,  259. 

R 

RAILROAD  carrier's  liability  forms,  324,  326,  328. 

Rate  books,  127. 

Rates,  Adequacy  of,  136-137;  competition  in,  140;  consistency  in,  139;   defini- 
tions, 125-127  ;  fairness  in,  137-139  ;   flexibility  in,  139-140  ;  made  by,  127 
problem   of,   134-142;    proposed  by  Dr.  Nicolas  Barbon,   129,  168;   public 
interest  in,  135  ;  tariff  -vs.  non-tariff  companies,  141-142  ;  schedule,  142-152 
scope  of  inquiry,  125  ;  tax  assessment  compared  with,  134-136. 

Rates,  Questions  on,  128,  134,  142,  151  ;   schedules  for  first  used  in  St.  Louis,  134 
bibliography  of,  152-153. 

Rate  making,  fire  loss  and,  135  ;   history  of,  128-134. 

Ratification  of  agency,  401-402. 

Rebates  prohibited,  418-419. 

Recording  devices.  Watchmen's,  193-198. 

Recording  systems.  Local  agency,  435-438. 

Reduced  rate  average  clause,  331. 

References  for  collateral  reading.     See  Bibliography. 

Refrigerating  plants,  insurance  on,  351. 

Register,  Company,  434. 

Reinsurance,  416  ;  companies  to  make  sworn  returns  of,  430. 

Relative  combustibility:  alcohol,  163;  celluloid,  163;  gasolene,  163;  gun 
powder,  162.   hard  coal,  163;    wood,  163. 

Remittances,  440. 

Removal  of  insured  property,  337. 

Removal  permit.  Form  of,  344. 

Rent  insurance,  304-306;  form  for,  305,  310-311. 

Rental  value,  305. 

Report  blanks.  Inspection,  199-200. 

Representation,  Fraudulent,  422. 

Reservoirs,  251. 

Resistance  defined,  7;   Electrical  defined,  7;  testing  of  insulation,  15. 

Resistance  boxes,  15. 

Revocation  of  agent's  license,  413. 

Richards,  Benjamin:  Boot  and  shoe  factories — their  processes  and  hazards, 
95-122  ;   pumps,  227-247  ;   waterworks,  248-260. 

Riders  on  fire  policies,  421. 

Risk,  Excessive,  outside  of  state,  416-417;   limitation  of,  416. 


472  LECTURES  ON  FIRE  INSURANCE 


Robinson,  J.  Albert:   Common  fire  hazards,  37-94. 

Roof  hydrants,  183. 

Ross,  Alexander,  202. 

Rotary  fire  pumps,  228-230,  236-239. 

Royal  Exchange  Assurance,  129. 

Rubber  cement,  109;   fire  hazards  of,  106-107;  storage  cans  for  safe  handling  of, 

107. 
Rules  governing  water  supply  for    fire    service,    250;   National    Board    of    Fire 

Underwriters,  39. 


SAINT  LOUIS,  Mo.,  First  schedule  rating  in,  134;  Manufacture  of  shoes  in, 
95. 

Salamander  Society,  The,  132. 

Salaries  in  excess  of  $5000  a  year,  412. 

Salt,  as  preventive  of  freezing,  179 

Salt  water  as  fire  extinguisher,  164. 

San  Francisco,  Earthquake  in,  363-364. 

Sawdust,  Fire  hazards  of,  81. 

Schedule  rates,  127,  142-152;  Consistency  in,  147;  first  made  in  Saint  Louis, 
Mo.,  134. 

Schedules:  not  exact  measures  of  fire  hazard,  147;  preparation  of,  146;  sample  of, 
143;  special  hazards,  148. 

Scrubber,  Gas  plant,  described,  66-67. 

Searchlight  wagons,  222. 

Seasonable  fire  hazards,  88. 

Secondary  circuits,  Grounding  of,  20. 

Self-inspection,  199-200. 

Series  connection,  8. 

Service  wires,  21. 

Shafting,  Fire  hazards  of,  70. 

Shoe  factories,  95-122;  bibliography,  120;  bottoming  department,  102,  111-112; 
buffing,  104;  Causes  of  fires  in.  111,  115-119;  cement  used  in,  107;  con- 
struction of,  95;  Counters  and  box  toes,  102;  Cutting  room,  100;  finishing 
department,  104;  fire  protection  of,  96;  fitting  room,  100;  heating  of,  97; 
lasts  used  in,  96;  lighting  of,  97;  naphtha  used  in,  109;  patterns  used  in^ 
96;  power,  97;  processes  and  hazards  of,  95-122;  questions  on,  119;  raw 
stock,  96;  rubber  cement,  106-107;  sole  department,  100;  stitching  room, 
100;  treeing,  104. 

Shoes,  Manufacture  of  in  the  United  States,  95. 

Short  circuit  defined,  9. 

Short  rate,  126;   tables  of,  129. 

Shunt,  8. 

Signalling  systems,  Electrical,  33. 

Smoke  stacks.  Hazards  of,  76. 

Smoking,  Fire  Hazards  of,  83. 

Smothering,  Fire  extinguishment  by,  165. 

Sockets,  28. 

Sold  or  assigned,  338. 

Sole  department.  Shoe  factories,  100. 

Special  agents.  Authority  of,  398-399. 

Special  hazards.  Safeguarding,  106;   Schedules,  148. 

Special  voidance  conditions,  343. 

Specific  heat,  164;  alcohol,  brass,  copper,  glass,  glycerine,  lead,  steel,  turpen- 
tine, water. 

Specific  insurance,  285. 

Specific  rate,  126. 

Spontaneous  combustion,  77-78;  clause,  348-350. 

Spread  of  fire,  160-161. 

Spring,  Fire  hazards  peculiar  to,  88. 


INDEX  473 


Sprinkler  alarms,  157;   warranty,  355-356. 

Sprinklers  automatic,  157-158. 

Sprinkler  leakage  insurance,  312-317;  amount  to  be  carried,  313-314;  forms  m 
use  by  mutual  and  stock  fire  insurance  companies,  316-317. 

Standard  clauses,  need  of,  343;   mercantile  building  schedule,  144. 

Standard  Policy,  279-281;  form,  419-421;  relation  of  forms  and  clauses  to,  275- 
276;   as  affected  by  clauses  of  permission,  335-336. 

Standard  risk,  145-146;   wiring,  26-28. 

Standpipes  and  hose,  180-188;  Maintenance  of,  182;  size  and  location  of,  180- 
182;  water  supply  for,  181-183;   questions  on,  187. 

State  -j's.  common  law,  411-412. 

Stationary  clocks,  195-196. 

Steam,  Fire  extinguishment  by,  165;  Heating,  Fire  hazards  of,  57-58;  pipes, 
protection  of,  59;   Supply  for  fire  pumps,  230. 

Steam  hre  engines,  215-218. 

Stitching  room.  Shoe  factory,  100;  special  hazards.  111. 

Storage  batteries,  17. 

Stove  pipes.  Fire  hazards  of,  54. 

Stoves,  Fire  Hazards  of,  53. 

Street  location  cards,  435-436;  Railway  properties.  Use  and  occupancy  insur- 
ance on,  302-303. 

Sub-agents,  Compensation  of,  392. 

Subrogation,  321;  clauses,  361. 

Suction  pipes  for  fire  pumps,  231. 

Suction  producer  gas  plants,  66-68. 

Summer,  Fire  hazards  peculiar  to,  88. 

Sun  Fire  Ofhce,  Proposals  of,  129. 

Sweeping  Compounds,  Fire  hazards  of,  81. 

Sweepings,  Fire  hazards  of,  80. 

Sweetland,  Ralph:   Electrical  fire  hazards,  3-35;  municipal  fire  alarms.  261-271. 

Switchboards,  14. 

Switches,  24-26. 

Syringe  type  of  fire  extinguisher,  171. 

Systems    in  local  agency.  Fast  and  present,  433-434. 


TANKS,  for  water  supply,  232. 

Tariffs,  127;  tariff  vs.  non-tariff  rates,  140-142. 

Tax  Commissioner,  Annual  returns  to,  427. 

Taxation  of  insurance  premiums,  427-428. 

Telephone  fire  alarm  System,  261-262. 

Term  rate  defined,  125. 

Termination  of  agency,  404. 

Tests,  Fire  pumps,  245-247;  thermostat  systems,  213-214. 

Theatres,  Electrical  installations  in,  296. 

Thermostats,  157-214;  defined,  202;  bibliography,  201;  history,  202-204;  mis- 
cellaneous types,  208-209;  questions  covering,  214;  rules,  209-210;  systems, 
204,  213-214;  wiring  systems,  211-213. 

Three  fourths  loss  clause,  367. 

Three  fourths  value  clause,  366-367. 

Three  wire  system  defined,  9. 

Tilden,  J.  A.,  203. 

Torches,  Fire  hazards  of,  40. 

"Tourist"  policies,  318-319. 

Transformers,  9,  18,  20;   air  cooled  for  inside  use,  28-29;   inside  buildings,  32. 

Transmission  of  fire  by  gases,  160. 

Tubes,  Fire  extinguisher,  170. 

Tubular  boilers,  71. 

Turn  shoes.  How  made,  99. 

Two  wire  systems  defined,  9. 


474  LECTURES  ON  FIRE  INSURANCE 


U 

UNAUTHORIZED    COMPANIES,  Insurance  in,  424-425. 

Underground  conductors,  22. 

Underwriter  steam  fire  pump,  229. 

Underwriters'  Association  of  the  Middle  Department,  134;  of  New   York  State 
134. 

Underwriters'  Laboratories,  Rules  of  for  thermostat  systems,  209-210. 

Underwriters'  National  Electric  Association,  11,  12. 

Uniformity  in  forms  and  clauses.  Desirability  of,  282. 

United  States  Thermostat,  205. 

Universal  Mercantile  Schedule,  142. 

"  Unoccupancy  "  permits,  346. 

Untidiness,  Fires  caused  in  shoe  factories  by,  117. 

Upset  Chemical  extinguisher,  172-173. 

Use  and  occupancy  insurance,  297-304;  adjustment  of  losses  under,  300-302; 
amount  to  be  carried,  300;  definition  of,  298-299;  on  street  railway  proper- 
ties, 302-303;  use  and  occupancy  -vs.  profits  insurance,  298-299;  precautions 
to  be  used  in  writing,  303-304;   forms,  309-310. 


VACANCY,    339;   permit,  346. 

Value  of  insurance  agency,  457. 

Valued  policy,  282. 

Valves,  Hose,  183. 

Ventilation,  Direct  and  Indirect  systems,  59. 

Vertical  boilers,  72. 

"Viscol,"  How  composed,  108. 

Voidance,  Conditions  of,  343;   bearing  of  on  contract,  333-334. 

Voidance  clauses — Alienation,  338;  attempt  to  defraud,  341;  concealment  or 
misrepresentation,  336;  increase  of  risk,  337;  leased  land,  343;  overtime 
operating,  340;  other  insurance,  336;  removal  of  insured  property,  337;  sold 
or  assigned,  338;  vacancy  and  non-occupancy,  339;  withholding  material 
facts,  336. 

Volatiles,  Use  and  storage  of,  82. 

Voltage,  Electrical,   defined,  7. 

w 

WAGGONER,  Sanitary  Fire  Bucket,  169. 

Waiver  and  estoppel,  332-333. 

IVall,  Thermostat,  207. 

Warranties,  417;  dwelling  house,  355;  Electrical  equipment  356;  petroleum  pro- 
ducts, 354;  sprinkler,  355-356. 

Warranty,  Clauses  of,  353-357. 

Waste  chutes  in  factories,  115,   117. 

Watchmen's  157;  qualifications  of,  190;  duties  of ,  191-192;  watchmen's  lanterns, 
192-193;  watchmen's  recording  devices,  193-198;  watchmen's  service,  189- 
201;   Watchmen's  service,  questions  on,  201;  bibliography,  201. 

Watchmen's  systems.  Wiring  for  central  stations,  197-198. 

Water,  as  Fire  extinguisher,  158,  164;   as  fire  hazard,  89. 

Water  pipes,  253;  laying  of,  254;  pressure  and  friction  losses  in,  256-257;  de- 
terioration of,  257. 

Water  power.  Hazards  of,  63. 

Water  supply  for  fire  service.  Rules  governing,  250;  for  standpipes,  181. 

Water  systems,  see  Waterworks. 

Water  towers,  222. 

Water  tube  boilers,  73. 


INDEX  475 


Waterworks,  248-260;  bibliography,  260;   pipes,  253-259;   public  ownership  'vs. 

private  ownership,  249-250;  questions,  259. 
Waterworks  systems.   Direct  pumping,  251-252;  distribution,  253-259;  gravity, 

250-253;  hydrants,  254-255. 
Watkins,  Thermostat,  205. 
Wax  pots.  Fire  Hazards  of,  113. 
IVhite  Thermostat,  207. 
Winter,  Fire  hazards  peculiar  to,  88. 
Wireless  telegraph  apparatus,  33. 
Wiring  rules,  22-23;  thermostat  systems,  211-213. 
Wood,  123. 

Woodman   Thermostat,  206. 
Worcester  pail,  168. 
Workmen's  clothes,  care  of,  81. 
World  Fire  Extinguisher,  170. 
Wrecking  wagons,  222. 


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